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If you invested in Armstrong stock or options between March 6, 2018 and November 4, 2019 and would like to discuss your legal rights, click here: www.faruqilaw.com/AFI. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to [email protected]
FARUQI & FARUQI, LLP
685 Third Avenue, 26th Floor
New York, NY 10017
Attn: Richard Gonnello, Esq.
Telephone: (877) 247-4292 or (212) 983-9330
The lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of all those who purchased Armstrong securities between March 6, 2018 and November 4, 2019 (the "Class Period"). The case, Michael Chupa v. Armstrong Flooring, Inc. et al, No. 19-cv-09840 was filed on November 15, 2019, and has been assigned to Judge Christina A. Snyder.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making materially false and/or misleading statements, as well as failing to disclose to investors: (1) that the Company had engaged in channel stuffing to artificially boost sales; (2) that the Company's internal control over inventory levels was not effective; and (3) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
The truth began to emerge on May 3, 2019 when Defendant Maier abruptly resigned from his positions. In a Form 8-K filed with the SEC, the Company disclosed that "pursuant to a mutual agreement between the Company and Donald R. Maier, Mr. Maier's employment with the Company ceased and he resigned as a member of the Board of Directors."
On this news, Armstrong's stock price fell from $14.89 per share on May 2, 2019 to a closing price of $13.14 per share on May 3, 2019-a $1.75 or 11.75% drop.
Then, on November 5, 2019, before the market opened, the Company reported $165.6 million net sales for third quarter 2019, a nearly 21% decline year-over-year, and a net loss of $31.4 million. The Company also cut its full year 2019 guidance for adjusted EBITDA to a range of $20 million to $25 million, from prior guidance range of $46 million to $54 million.
On this news, Armstrong's stock price fell from $6.60 per share on November 4, 2019 to a closing price of $3.70 per share on November 5, 2019-a $2.90 or 43.94% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Armstrong's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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