Shareholder Alert: Robbins LLP Announces HEXO Corp. (HEXO) Sued for Misleading Shareholders
December 02 2019 - 12:46PM
Business Wire
Shareholder rights law firm Robbins LLP announces that
purchasers of HEXO Corp. (NYSE: HEXO) filed a class action
complaint for alleged violations of the Securities Exchange Act of
1934 between January 25, 2019 and November 15, 2019. HEXO produces,
markets, and sells cannabis in Canada.
If you suffered a loss as a result of HEXO's misconduct, click
here.
HEXO Corp. (HEXO) Accused of Artificially Inflating Revenue
Through Channel-Stuffing
According to the complaint, in March 2019, HEXO announced its
definitive agreement to acquire Newstrike, parent company of a
licensed producer of Cannabis, touting that HEXO was on its way to
becoming one of the largest cannabis companies in the world and
committed itself to achieving over $400 million in net revenue in
FY 2020. Throughout the relevant period, HEXO continued to
positively represent the Company's financials, consistently
reporting net revenues and inventory values in the tens of
millions. However, HEXO failed to disclose that its reported
revenues had been inflated through the use of channel-stuffing to
meet its FY 2020 revenue guidance and that its reported inventory
was misstated due to failure to write-off obsolete product. The
truth of its financial situation was revealed on October 10, 2019,
when HEXO provided preliminary Q4 revenue results that were nearly
50% lower than its previous guidance and withdrew its previously
announced FY 2020 guidance. Then, on October 29, 2019, HEXO further
disappointed investors with wider than expected losses in Q4 2019,
which included an impairment loss of nearly CA$17 million.
Following all of its disclosures, HEXO's stock plummeted almost 58%
and has yet to recover.
HEXO Corp. (HEXO) Shareholders Have Legal Options
Contact us to learn more: Leo Kandinov (800) 350-6003
lkandinov@robbinsllp.com Shareholder Information Form
Robbins LLP is a nationally recognized leader in shareholder
rights law. The firm represents individual and institutional
investors in shareholder derivative and securities class action
lawsuits, and has helped its clients realize more than $1 billion
of value for themselves and the companies in which they have
invested. Click here to receive free alerts from Stock Watch when
companies engage in wrongdoing.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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version on businesswire.com: https://www.businesswire.com/news/home/20191202005785/en/
Leo Kandinov Robbins LLP 5040 Shoreham Place San Diego, CA 92122
lkandinov@robbinsllp.com (619) 525-3990 or Toll Free (800) 350-6003
www.robbinsllp.com
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