A class action lawsuit has been filed against the maker of CROCS footwear (product sample shown in photo). The suit alleges that the company and certain of its officers and directors violated federal securities laws.
Specifically, defendants issued materially false and misleading statements and failed to disclose:
(i) that CROCS was experiencing significant distribution problems in Europe as it had moved distribution facilities and was experiencing distribution problems in Japan with a third-party distributor, causing the Company to lose tens of millions of dollars in sales.
(ii) that the Company's sales were being negatively impacted by seasonal conditions as consumers reduced purchases of the Company's products in cold weather climates.
(iii) that the Company's inventory levels were building far beyond historic levels as sales began to slow and the Company's sales began to be impacted by seasonality.
(iv) based on the foregoing, Defendants lacked a reasonable basis for their positive statements about the Company, its earnings and prospects.
Further, back in June Crocs (NASADQ: CROX) insiders were dumping their stocks which fell from $74.75 per share to $47.74 per share during the third quarter of 2007.
Executives and board members of the company are accused of selling a total of $58 million in stock in the third quarter.
Link here and here.
A picture of my cave
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