Press release from Business Wire
Hagens Berman Investigates Tile Shop Holdings, Inc.
Monday, November 25, 2013
Hagens Berman Investigates Tile Shop Holdings, Inc.09:30 EST Monday, November 25, 2013
BERKELEY, Calif. (Business Wire) -- Hagens Berman Sobol Shapiro LLP, a national investor-rights law firm, today announced it is investigating Tile Shop Holdings, Inc. (“Tile Shop”) (NASDAQ: TTS) following a series of allegations by a short-seller firm, including that the company dramatically overstated earnings and failed to disclose that Beijing Pingxiu, the company's largest supplier, was secretly controlled by the brother-in-law of Tile Shop's CEO. Investors who have suffered significant financial losses may contact a Hagens Berman attorney working on the investigation by emailing TTS@hbsslaw.com.
Hagens Berman's investigation seeks to uncover additional information about potential investor claims against Tile Shop. A class-action securities suit has been filed in federal court on behalf of investors who purchased Tile Shop securities between Aug. 22, 2012, and Nov. 13, 2013. Those investors can contact Hagens Berman Partner Reed Kathrein, who is leading the Hagens Berman's investigation, by calling (510) 725-3000. Additional information is available at http://hb-securities.com/investigations/TTS.
The investigation centers around allegations made in a report published by short-seller firm Gotham City Research LLC on Nov. 14, 2013. The report claimed that:
- Tile Shop overstated its earnings in 2013 by more than 200 percent.
- Beijing Pingxiu (BP), the company's largest supplier, was related to Tile Shop, in that BP is secretly controlled by the brother-in-law of Tile Shop's CEO.
- Tile Shop used BP to exaggerate its inventory and profits, purchasing goods at or near cost.
Gotham City's report concluded that Tile Shop will be forced to restate the past several years' financial results, and that Tile Shop shares were dramatically undervalued.
Following the release of the report, Tile Shop's stock price fell from a close of $21.22 on Nov. 13, 2013, to a close of $12.95 the next day. Following the price drop, Citigroup downgraded the company's rating from buy to neutral on Nov. 18, 2013.
“Citigroup's decision to downgrade Tile Shop stock's rating gives further legitimacy to Gotham City's claims,” said Mr. Kathrein. “We will continue to investigate to determine whether investors have a claim against Tile Shop for failing to disclose these issues earlier, and potentially perpetuating a fraud on the market by exaggerating its financial results.”
Persons with non-public information should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new SEC whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC.
About Hagens Berman
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in nine cities, including the San Francisco Bay Area where this lawsuit has been filed. The Firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the law firm and its successes can be found at www.hbsslaw.com. The Firm's Securities Newsletter is at http://www.hb-securities.com/newsletter.
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