WASHINGTON, DC (July 24, 2017) — U.S. Market Advisors Law Group PLLC announces that a class action lawsuit has been filed against Lexmark International, Inc. (“Lexmark” or the “Company”) (NYSE:LXK-Delisted). The class action is on behalf of investors who purchased or otherwise acquired Lexmark stock, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934. The case has been docketed under 17-cv-05543 in United States District Court for the Southern District of New York.
If you are a shareholder who purchased Lexmark stock between August 1, 2014 – July 20, 2015 (“Class Period”), you have until September 19, 2017 to ask the Court to appoint you as Lead Plaintiff for the class. The Lead Plaintiff is a representative for absent members of the class.
Investors do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action. Contact USMA Law Group to discuss this action.
Lexmark is a manufacturer of printers and related supplies, primarily ink cartridges. Lexmark sells its products to wholesale distributors and large retail chains in more than 90 countries around the world. Based on its 2014 financial results, 37 percent of Lexmark’s total revenues were generated within its Europe, Middle East and Africa (“EMEA”) segment. Supplies sales in Europe are especially critical to the EMEA segment.
Allegations Against Lexmark
The Complaint alleges throughout the Class Period Lexmark made false and misleading statements regarding its end-user demand, channel inventory, and growth prospects for its high-margin supplies business. The Company also failed to disclose deterioration in end-user demand and excessive inventory levels at its European wholesale distributors. Lexmark ultimately acknowledged that its supplies growth was not attributable to end-user demand but rather the result of its European customers buying ahead of customary price increases which produced excessive inventory.
The truth was finally revealed on July 21, 2015, when the Company reported poor results for its second quarter ending June 30, 2015 and lowered its 2015 sales guidance. Lexmark blamed these disappointing results on lower-than-expected supplies revenue from its European wholesale distributors. Lexmark explained that the Company had increased supplies prices for its European distributors three times between October 2014 and June 2015. In reaction to these price increases, European distributors immediately stocked up on supplies prior to the expiration of their fixed-price contracts while slowing down their purchases from Lexmark.
On this news, Lexmark stock dropped $9.57 per share, or 20.2 percent, wiping out approximately $550 million in market capitalization.
Post-Class Period Activity: In November 2016, the Company was acquired for $2.5 billion by a consortium of private investors led by Apex Technology Co., Ltd. and PAG Asia Capital and is no longer listed for trading.
U.S. Market Advisors Law Group PLLC is a national law firm based in Washington, D.C. The firm represents investors worldwide in U.S. securities class action lawsuits.
David P. Abel