SAN DIEGO and WATERBURY, Vt., June 24, 2015 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that a federal securities fraud class action complaint has been filed in the U.S. District Court for the Northern District of California. The complaint alleges that officers and directors of Keurig Green Mountain, Inc. (NASDAQ: GMCR) violated the Securities Exchange Act of 1934 between February 4, 2015 and May 6, 2015, by making materially false and misleading statements about Keurig's business prospects. Keurig produces and sells specialty coffee, coffeemakers, teas, and other beverages in the United States and Canada.
View this information on the law firm's Shareholder Rights Blog:
Keurig Misrepresents Its Business Practices
According to the complaint, defendants failed to disclose that the Company's sales projections were unrealistic and unattainable due to consumer confusion over the Keurig 2.0 brewing system. The complaint further alleges that defendants did not reveal that the retail distribution of the Company's new cold brewing system, Keurig Kold, was delayed.
Keurig's original brewer uses single-serve canisters, whereas the Keurig 2.0, released in August 2014, allows users to brew a carafe of coffee. On February 4, 2015, the Company indicated that consumer confusion as to which brands of coffee the Keurig 2.0 system could brew negatively impacted the Company's financial performance. The Company also stated that its plans for Keurig Kold were progressing well and it was on track to launch in the fall of 2015.
On May 6, 2015, the Company issued a press release revealing that sales growth fell below its previously stated expectations, primarily due to the slow transition to the Keurig 2.0 system. The Company stated that point of sale results were not as strong as anticipated, which led to higher levels of inventory in retail stores. An article in Bloomberg Business published the same day noted that sales volume for the brewers declined 22% last quarter, underscoring the slow adoption of the Keurig 2.0. On this news, shares of Keurig fell $9.92 per share, or over 9%, to close at $98.16 per share on May 7, 2015.
On May 14, 2015, the Company held a webcast during which it revealed the Keurig Kold would be sold online and in certain stores in the fall of 2015, but would not be available in all its retail outlets until 2016. On this news, Keurig shares fell $8.82 per share, or over 8%, to close at $94.26 per share on May 15, 2015.
Keurig Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, [email protected], or via the shareholder information form on the firm's website.
Robbins Arroyo 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.
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SOURCE Robbins Arroyo LLP