RADNOR, Pa., June 16, 2016 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed against CPI Card Group, Inc. (Nasdaq: PMTS) ("CPI Card" or the "Company") on behalf of purchasers of the Company's common stock issued pursuant and/or traceable to the Company's initial public offering ("IPO") on or around October 8, 2015.
CPI Card shareholders may, no later than August 15, 2016, petition the Court to be appointed as a lead plaintiff representative of the class. For additional information please visit https://www.ktmc.com/new-cases/cpi-card-group-inc#join
Shareholders who wish to discuss this action and their legal options are encouraged to contact Kessler Topaz Meltzer & Check, LLP (Darren J. Check, Esq., D. Seamus Kaskela, Esq. or Adrienne O. Bell, Esq.) at (888) 299 – 7706 or at firstname.lastname@example.org.
CPI Card is a "provider in payment card production and related services," and offers among other products, "EMV cards" (also referred to as "chip cards") that store data on integrated circuits rather than magnetic stripes. EMV chip cards help improve security against fraud as compared to magnetic stripe card transactions which rely on a cardholder's signature and a visual inspection of the card. In recent years, credit and debit card issuers have substantially increased the level of EMV cards issued to account holders.
On October 8, 2015, CPI Card completed its IPO. The IPO was a financial success for the Company, certain of its senior executive officers and private investment funds, as they collectively sold 17.25 million shares of common stock to investors at $10.00 per share for gross proceeds of $172.5 million.
The complaint alleges that the Offering Materials issued in connection with the IPO were negligibly prepared, contained untrue statements of material facts, and omitted to state other necessary facts. Among other things, the complaint alleges that at the time of the Company's IPO its largest EMV card customers were significantly over-inventoried with EMV cards, having increased purchases in the first half of 2015 far in excess of card issuance, resulting in a massive backlog of EMV card inventory for those customers. As a result, those large EMV card customers would significantly reduce their card purchases from CPI Card in the fiscal quarters following the IPO as they worked through their bloated card inventories.
On May 11, 2016, CPI Card reported disappointing first quarter 2016 financial and operational results and significantly reduced its fiscal 2016 financial outlook. As detailed in the earnings announcement, "the carryover into 2016 of unissued EMV card inventories at the large issuers and processors is much greater than anticipated, and accordingly, their EMV card purchases are being curtailed until inventories return to normal levels." Following that earnings announcement the Company's shares declined $3.65 per share, or over 47%, to close the following day at $4.01 per share. The closing price of CPI Card's common stock on May 12, 2016 represented a decline of 60% from the price of the common stock sold to investors at the time of the IPO seven months prior.
CPI Card shareholders may, no later than August 15, 2016, petition the Court to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class in the action. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check. For more information about Kessler Topaz Meltzer & Check, or for additional information about participating in this action, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
Darren J. Check, Esq.
D. Seamus Kaskela, Esq.
Adrienne O. Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
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SOURCE Kessler Topaz Meltzer & Check, LLP