CPI Card investors may receive additional information about the case by clicking the link "Join this Class Action" above.
According to the complaint, CPI Card is a “provider in payment card production and related services,” and offers among other products, “EMV cards” (also referred to as “chip cards”) that store data on integrated circuits rather than magnetic stripes. EMV chip cards help improve security against fraud as compared to magnetic stripe card transactions which rely on a cardholder’s signature and a visual inspection of the card. In recent years, credit and debit card issuers have substantially increased the level of EMV cards issued to account holders.
On October 8, 2015, CPI Card completed its IPO. The IPO was a financial success for the Company, certain of its senior executive officers and private investment funds, as they collectively sold 17.25 million shares of common stock at $10.00 per share for gross proceeds of over $172.5 million.
The complaint alleges that the Offering Materials issued in connection with the IPO were negligibly prepared, contained untrue statements of material facts, and omitted to state other necessary facts. Among other things, the complaint alleges that at the time of the Company’s IPO its largest EMV card customers were significantly over-inventoried with EMV cards, having increased purchases in the first half of 2015 far in excess of card issuance, which resulted in a massive backlog of EMV card inventory for those customers. As a result, those large EMV card customers would significantly reduce their card purchases from CPI Card in the fiscal quarters following the IPO as they worked through their bloated card inventories.
On May 11, 2016, CPI Card reported disappointing first quarter 2016 financial and operational results and significantly reduced its fiscal 2016 financial outlook. As detailed in the earnings announcement, “the carryover into 2016 of unissued EMV card inventories at the large issuers and processors is much greater than anticipated, and accordingly, their EMV card purchases are being curtailed until inventories return to normal levels.” Following this earnings announcement the Company’s shares declined $3.65 per share, or over 47%, to close the following day at $4.01 per share. The closing price of CPI Card’s common stock on May 12, 2016 represented a decline of 60% from the price of the common stock sold to investors at the time of the Company’s IPO seven months prior.
If you are a member of the class described above, you may no later than August 14, 2016 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org. For more information about Kessler Topaz Meltzer & Check, LLP, please visit our website at http://www.ktmc.com.
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