Levi & Korsinsky Announce STMP Lawsuit; STMP Class Action
Levi & Korsinsky, LLP
April 3, 2019
Grabisch v. Stamps.com, Inc., et al 2:19-cv-01497 — On February 28, 2019, investors sued Stamps.com, Inc. (“Stamps.com” or the “Company”) in United States District Court, Central District of California. Plaintiffs in the STMP class action allege that they acquired Stamps.com stock at artificially inflated prices between May 3, 2017 and February 21, 2019 (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 STMP lawsuit, please contact us today!
Summary of the Allegations
The Company (NASDAQ: STMP) bills itself as “the leading provider of Internet-based postage solutions,” and “the first company to be approved by the U.S. Postal Service® (USPS) to offer a software-only postage service that lets customers buy and print postage online.”
As such, it says that it caters to small businesses, home offices and online retailers. It also claims that it has more than 730,000 monthly subscribers.
The Company says provides its users with reliable and convenient means to print postage using their existing computer, printer and Internet connection. Stamps.com also claims that its service allows its customers to coordinate mailing and shipping operations more effectively and securely than they can via traditional means.
Summary of Facts
Stamps.com and three of its current and former senior officers and/or directors (the “Individual Defendants”) are now accused of deceiving investors by lying and/or withholding critical information about the Company’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about the Company’s financial results from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Stamps.com stock to trade at artificially inflated prices during the time in question.
The truth came out in a conference call conducted by the Company after the market closed on February 21, 2019. During the call, which Stamps.com held to discuss several matters, the Company’s chairman and CEO abruptly announced the termination of its shipping partnership with USPS. The announcement came as a shock because “USPS-related business” accounts for the vast majority of its revenue. In another shocking revelation, the Company also announced that it expected its 2019 revenue to drop by more than 5 percent.
A closer look…
As alleged in the February 28 complaint, Stamps.com and/or the Individual Defendants repeatedly made false and misleading public statements during the Class Period.
For example, in a press release issued at the outset of the Class Period, one of the Individual Defendants stated in relevant part: ‘In addition to our overall revenue and earnings growth, during the first quarter we reached our highest level of paid customers, we saw continued strong growth in our shipping business areas, and we experienced strong contributions from all of our subsidiaries.”
In the same press release, the same person added in relevant part: “We remain very excited about our future prospects….”
Then, during an earnings call held on August 2, 2017, the same Individual Defendant stated in pertinent part: “the partnership with the Postal Service is continuing to be stronger and stronger…”
Impact of the Alleged Fraud on Stamps.com’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 April 29, 2019. 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 Stamps.com 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.