Wayfair investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Wayfair is an online purveyor of household retail goods.
The Class Period commences on August 2, 2018, when, before the opening of the market, Wayfair issued a press release announcing its second quarter 2018 financial results for the period ended July 30, 2018. The press release emphasized Wayfair’s “Q2 Direct Retail Net Revenue Growth of 49% Year over Year to $1.6 billion” and that it had “12.8 million Active Customers, up 34% Year over Year.”
According to the complaint, on November 1, 2018, before the open of trading, Wayfair issued a press release announcing its third quarter 2018 financial results. Though its Direct Retail net revenue grew 43.3% year over year, Wayfair reported a massive $151.7 million net loss for the quarter under Generally Accepted Accounting Principles (“GAAP”), or $(1.69) per share, compared with a GAAP loss of $76.4 million, or $(0.88) per share, for the third quarter 2017. In reality, advertising expenses had skyrocketed in the third quarter 2018 to more than $202.5 million, an increase of 43%, meaning that total operating expenses rose 52% to $538 million and costs rose by more than 50% for expenses, including technology and operations as well as customer service and merchant fees, significantly increasing Wayfair’s reported GAAP losses. Rather than the third quarter “consolidated adjusted EBITDA . . . margins of negative 3.7% to negative 4%” the defendants had stated Wayfair was on track to achieve on August 2, 2018, Wayfair reported a negative adjusted EBITDA of “$(76.4) million or (4.5)% of total net revenue.”
Following this news, the price of Wayfair common stock declined, closing down more than $14 per share, or nearly 13%, to close at $96.16 per share on November 1, 2018.
The complaint alleges that throughout the Class Period, the defendants failed to disclose the following material adverse facts which were known to the defendants or recklessly disregarded by them: (a) Wayfair had been experiencing significantly diminished demand for its online product offerings and had significantly increased advertising spending to grow sales; (b) Wayfair, which was already more than one-third of the way into its third quarter 2018 when its announced its second quarter 2018 results on August 2, 2018, had already dramatically increased advertising spending for its third quarter 2018; and (c) as a result, the defendants’ statements about Wayfair’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
If you are a member of the class described above, you may no later than March 11, 2019 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. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at email@example.com