Qurate Class Action Filed, Levi & Korsinsky Announces QRTEA Lawsuit
Levi & Korsinsky, LLP
September 18, 2018
Bristol County Retirement System v. Qurate Retail, Inc. et al 1:18-CV-02300-MEH — On September 6, 2018, investors sued Qurate, Inc. (Qurate, QRTEA, or the Company) in United States District Court for the District of Colorado. Plaintiffs in the QRTEA class action allege that they acquired Qurate stock at artificially inflated prices between August 5, 2015 and September 7, 2016 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the QRTEA Lawsuit, please contact us today!
Summary of the Allegations
According to its website, Qurate (NASDAQ:QRTEA/QRTEB) is comprised of “eight leading retail brands, reaching approximately 370 million homes worldwide through 16 television networks and multiple ecommerce sites, social pages, mobile apps, print catalogs and in-store destinations.”
Qurate’s brands include the TV shopping channels QVC and HSN, Zulily, Ballard Designs, Front Gate, Garnet Hill, grandinroad and Improvements. In all, the Company says, its brands reach 23 million customers.
Of all of its brands, QVC is the largest, “accounting for roughly 85 percent of the Company’s total revenue in 2016.” QVC programming in the United States is distributed “live 24 hours per day, 364 days per year,” and features an average of 800 products per week. Its live programming is distributed for eight to 24 hours per day in its international markets. QVC’s product categories include: home, apparel, beauty, electronics and jewelry.
Qurate’s claims about its growth and its failure to disclose the correlation of its growth with changes related to a QVC payment system called “Easy Pay” are at the crux of the September 6 complaint.
Summary of Facts
Qurate and four of its current and former officers and directors (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about Qurate’s growth and its correlation with changes to QVC’s “Easy Pay” program from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused the Company’s stock to trade at artificially inflated prices during the time in question.
The truth initially surfaced on August 5, 2015, when the Company issued a press release announcing the financial results for the quarter that ended on June 30, 2016. In it, the Company attributed a drop in QVC sales to “significant headwinds.”
During a conference call with analysts and investors that day, the Company admitted that there were “higher than expected write-offs on Easy Pay purchase from October and November last year.” However the Company also blamed other factors for the drop in sales.
Then at an industry conference held September 8, 2016, Qurate finally disclosed the extent of the impact “Easy Pay issues” had on its business.
A closer look…
As alleged in the September 6 complaint, the Company and/or Individual Defendants repeatedly made false or misleading public statements throughout the Class Period.
For instance, on a Third Quarter 2015 Earnings Call with analysts and investors on November 4, 2015, one of the Individual Defendants stated in pertinent part: “This strong customer growth was fueled by engaging products and programming, the continued work on personalization initiatives, enhanced digital marketing and growing mobile penetration.”
On its Fourth Quarter 2015 Earnings Call with analysts and investors, which was held on February 26, 2016, the same Individual Defendant stated in relevant part: “We think these strong customer dynamics are the result of our focus on compelling merchandise and content and our increasing focus on personalizing our digital platforms.”
Finally, during an Investor Meeting Call held May 15, 2016, another Individual Defendant stated in relevant part: “…since 2008, we’ve been able to manage our bad debt to about 1% of our business, and that is not starting to grow in any kind of dramatic way.”
Impact of the Alleged Fraud on Qurate’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:|
|Closing stock price the trading day after disclosures:|
|One day stock price decrease (percentage) as a result of disclosures:|
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is November 5, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Qurate common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.
For additional information about this case or our institutional services, please contact us.