NEW YORK, July 09, 2020 (GLOBE NEWSWIRE) — Pomerantz LLP is investigating claims on behalf of investors of Casper Sleep Inc. (“Casper” or the “Company”) (NYSE: CSPR). Such investors are advised to contact Robert S. Willoughby at firstname.lastname@example.org or 888-476-6529, ext. 7980.
The investigation concerns whether Casper and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
On or around February 7, 2020, Casper conducted its initial public offering (the “IPO” or “Offering”), selling 8.35 million shares of common stock priced at $12.00 per share. In the lead-up to the IPO, Casper claimed to have significantly improved its profit margins, placing it on a path to profitability. Shortly after the IPO, however, Casper announced downward gross margin trends and substantially impaired operations as a result of an increasingly dire cash flow situation.
On April 21, 2020, Casper announced that it was taking significant actions to improve its cash position and business model, notwithstanding the fact that the Company had raised more than $100 million in gross offering proceeds from the IPO less than three months previously. The Company stated that it was reducing the size of its global operations and sales team and completely winding down its European operations, leading to the loss of 21% of its entire corporate workforce globally. These drastic measures were necessitated by the Company’s ballooning losses and deteriorating cash position. Casper also announced the resignation of Gregory Macfarlane, the Company’s Chief Financial Officer and Chief Operating Officer.
On May 12, 2020, Casper issued a release providing its financial results for the quarter ended March 31, 2020, disclosing that it had suffered a net loss of $34.5 million, representing a 98% increase year over year, and an adjusted EBITDA loss of $22.9 million, representing a 60% increase year over year. In addition, Casper stated that its gross margin had actually fallen during the quarter by 190 basis points.
Also on May 12, 2020, Casper filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission in which the Company disclosed that its cash and cash equivalents had only increased $48.5 million during the quarter, despite the fact that the Company received over $88 million in net cash proceeds from the IPO. The Form 10-Q stated that during the quarter Casper had suffered over $40 million in negative cash flows from operating and investing activities.
On June 19, 2020, Casper’s stock price closed at $8.78 per share, representing a decline of nearly 27% from the Offering price.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980