SAN FRANCISCO, Oct. 11, 2019 /PRNewswire/ -- Hagens Berman notifies HEXO Corp. (NYSE: HEXO) investors of the firm's investigation of possible violations of federal securities laws. The firm urges HEXO investors who have suffered significant losses to submit a loss form now to learn if they qualify to recover their investment losses.
HEXO Corp. (HEXO) Investigation:
The investigation centers on whether HEXO misled investors about the propriety of its business model, including the ability to sell its cannabis through retailers.
On October 4, 2019, HEXO announced the abrupt and immediate resignation of its Chief Financial Officer. This resignation came just a few months into the job.
A few days later, Bank of America analyst Christopher Carey reportedly double downgraded his "buy" recommendation to "underperform" and commented "[p]ut simply: a departure that is so abrupt, from a person with CFO experience at other public companies, is concerning, and in our view will leave investors guessing 'what don't we know?' for some time."
Then, on October 10, 2019, HEXO provided preliminary Q4 2019 revenue results that were nearly 50% lower than previous guidance and withdrew previously announced FY 2020 guidance of up to $400 million in revenue. HEXO CEO Sebastien St-Louis attributed the poor performance to "lower than expected product sell through," and admitted the company would have to make "significant changes to our sales and operations strategy to drive future results."
"We're focused on investors' losses and whether the Company provided false financial guidance to investors," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you purchased shares of HEXO and suffered significant losses, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding HEXO Corp. should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 510-725-3000 or email [email protected].
About Hagens Berman
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Reed Kathrein, 510-725-3000
SOURCE Hagens Berman Sobol Shapiro LLP