Qurate Retail, Inc. (Nasdaq: QRTEA)
A class action has been commenced in the United States District Court for the District of Colorado on behalf of purchasers of Qurate Retail, Inc. (Nasdaq: QRTEA) securities during the period between August 5, 2015 to September 7, 2016 (the “Class Period”).
The complaint alleges that throughout the Class Period, Qurate repeatedly attributed its growth to broad-based marketing and higher personalized customer experience, which the Company claimed would spur continued revenue growth. However, defendants’ Class Period statements pertaining to the Company’s revenue growth were materially false and misleading because defendants failed to disclose that: (1) the Company was aggressively loosening the credit standards of its Easy-Pay program to attract new customers; (2) the Company's strong sales growth was due to this loosened credit policy; and (3) accounts receivable associated with these new customers posed a high risk of having to be written off.
The slowdown in QVC sales began to emerge on August 5, 2016, when the Company issued a press release announcing its financial results for the second quarter of 2016, ended June 30, 2016, in which the Company disclosed “significant headwinds” and sales declines compared to prior periods. Later that day, during the Company’s second quarter 2016 earnings call with analysts and investors, the Company disclosed “higher than expected write-offs on Easy Pay purchases from October and November of last year” and announced increased reserves for prior-period purchases. The Company also disclosed that “[g]iven heightened write-off risks, we choose to moderate our Easy Pay usage beginning in June, which puts some additional pressure on our sales.” On news of Qurate’s sales slowdown, the Company’s stock price fell $5.69 per share, or more than 21%, to close at $20.61 per share on August 5, 2016.
Then on September 8, 2016, the Company disclosed the true impact of its Easy-Pay issues, revealing to investors that it expected to see “higher default rates” associated with these sales. Moreover, the Company warned that this negative trend, while improved, would still continue to impact its business. On this news, the price of Qurate stock fell $1.87 per share, or nearly 9%, to close at $19.59 per share on September 8, 2016.
If you are a current shareholder and/or purchased stock pursuant during the period between August 5, 2015 to September 7, 2016 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.