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CSPR INVESTOR ALERT: Kirby McInerney LLP Announces That a Class Action Has Been Filed Against Casper Sleep Inc. and Encourages Investors to Contact the Firm Before August 18, 2020

/EIN News/ -- NEW YORK, June 29, 2020 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Eastern District of New York on behalf of those who acquired Casper Sleep Inc. (“Casper” or the “Company”) (NYSE: CSPR) securities pursuant and/or traceable to the Company’s February 7, 2020 (“IPO”). Investors have until August 18, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

The lawsuit alleges that the Offering Documents failed to disclose that: (i) Casper’s profit margins were actually declining, rather than growing; (ii) Casper was changing an important distribution partner, costing it 130 basis points of gross margin in the first quarter of 2020 alone; (iii) Casper was holding a glut of old and outdated mattress inventory that it was selling at steeply discounted clearance prices, further impairing the Company's profitability; (iv) Casper was suffering accelerating losses, further placing its ability to achieve positive cash flows and profitability out of reach; (v) Casper’s core operations were not profitable, but were causing the Company to suffer over $40 million in negative cash flows during the first quarter of 2020 alone and doubling its quarterly net loss year over year; (vi) as a result of the foregoing, Casper’s ability to achieve profitability, implement its growth initiatives, and expand internationally had been misrepresented in the Offering Documents, as the Company needed to shutter its European operations, halt all international expansion, jettison over one fifth of its global corporate workforce, and significantly curtail new store openings in order to avoid an imminent cash and liquidity crisis, let alone achieve positive operating cash flows; and (vii) as a result of the foregoing, Casper’s revenue growth rate was not sustainable and had not positioned the Company to achieve profitability.

In February 2020, the Company completed its initial public offering (“IPO”), in which it sold 8.35 million shares of common stock for $12 per share.

On April 21, 2020, Casper announced that it was decreasing the size of its global operations and sales team and completely winding down its European operations, amounting to a loss of 21% of its workforce. The Company also stated that Gregory Macfarlane had resigned from his positions as Chief Financial Officer and Chief Operating Officer.

On May 12, 2020, the Company announced its first quarter 2020 financial results, reporting a net loss of $34.5 million (a 98% increase year over year) and an adjusted EBITDA loss of $22.9 million (a 60% increase year over year).

Since the IPO, Casper’s share price has traded as low as $6.37 per share, or about 47% below the $12 IPO price.

If you acquired Casper securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at investigations@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.

Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, and whistleblower litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: www.kmllp.com.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
(212) 371-6600
investigations@kmllp.com
www.kmllp.com

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