NEW YORK, March 11, 2019 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Weight Watchers International, Inc. ("Weight Watchers" or the "Company") (NASDAQ:WTW) of the May 3, 2019 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in Weight Watchers stock or options between May 4, 2018 and February 26, 2019 and would like to discuss your legal rights, click here: www.faruqilaw.com/WTW. There is no cost or obligation to you.
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The lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all those who purchased Weight Watchers common stock between May 4, 2018 and February 26, 2019 (the "Class Period"). The case, Potts v. Weight Watchers International, Inc. et al., No. 19-cv-02005 was filed on March 4, 2019, and has been assigned to Judge William H. Pauley, III.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose: (1) that Weight Watchers was experiencing diminished subscriber demand due to the onslaught of new competing smartphone fitness apps and meal-delivery services, and that other tech advances were driving down Weight Watchers' new subscriber growth and its subscriber retention rates; (2) that diminished subscriber growth, when coupled with the much larger number of fourth quarter subscription lapses that Weight Watchers typically experiences, made it highly unlikely that the Company would retain four million subscribers by the end of 2018; (3) that Weight Watchers was not on track to grow its subscriber count to five million or to drive annual revenues to more than $2 billion by the end of 2020; and (4) that a decreased subscriber count would result in decreased revenues and profits.
On November 1, 2018, Weight Watchers announced disappointing financial results for the third quarter of 2018, ended September 30, 2018. Weight Watchers reported that it had lost 300,000 subscribers in the quarter, bringing its subscriber count down to 4.2 million, causing the Company's reported net revenues of $366 million to significantly underperform the $379 million defendants had led the market to expect.
On this news, the Company's stock price fell from $68.49 per share on November 1, 2019 to $48.13 per share on November 2, 2019—a $21.46 or 29.73% drop.
Then on February 26, 2019, after the close of trading, Weight Watchers announced its financial results for the 2018 fourth quarter and fiscal year. The fourth quarter subscriber count had fallen again, this time to 3.9 million, and defendants admitted that enrollment would continue declining during fiscal year 2019 ("FY19"), with CEO Mindy Grossman conceding that even though January is typically the best time for health-focused brands, January had been a particularly "hard month" for Weight Watchers.
On this news, the Company's stock price fell from $29.57 per share on February 26, 2019 to $19.37 per share on February 27, 2019—a $10.20 or 34.5% 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 Weight Watcher's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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