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Published January 10, 2025
MGP Ingredients gave investors a headache after the distiller admitted it hadn’t been truthful about its inventory levels. When investors learned the Company had higher inventory levels than indicated, investors quickly dumped their shares, causing MGPI’s stock price to plummet 50%. Now, some of those investors are signing up for a class action lawsuit to recover their losses.
From 2020 to 2022, alcohol sales spiked during the Covid pandemic. But, in 2023, when the pandemic waned, people started to drink less, leaving many distillers with excess inventory. At that time, MGPI executives assured investors that its inventory levels were stable and sales were strong. Yet, its executives knew better and MGPI warehouses were full of unwanted bottles.
Investors learned the truth in October 2024, when Company executives admitted soft demand for its products and higher inventory levels than previously admitted.
Analysts called the admission “breathtaking” and scolded the company for being deceptive. Shareholders quickly sold off their stock, causing massive declines. Now, some of those investors are pursuing legal action against the Company.