Daktronics Inc. Class Action Lawsuit - DAKT
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The Daktronics class action lawsuit seeks to represent purchasers or acquirers of Daktronics Inc. (NASDAQ: DAKT) securities between March 10, 2022 and December 6, 2022, inclusive (the “Class Period”). Captioned Settles v. Daktronics Inc., No. 22-cv-10793 (S.D.N.Y.), the Daktronics class action lawsuit charges Daktronics and certain of its top executives with violations of the Securities Exchange Act of 1934.
If you suffered substantial losses and wish to serve as lead plaintiff of the Daktronics class action lawsuit, please provide your information in the form on this page. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at firstname.lastname@example.org. Lead plaintiff motions for the Daktronics class action lawsuit must be filed with the court no later than February 21, 2023.
CASE ALLEGATIONS: Daktronics designs and manufactures electronic scoreboards, programmable display systems, and large screen video displays for sporting, commercial, and transportation applications.
The Daktronics class action lawsuit alleges that throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) Daktronics was experiencing challenges that increased costs, including supply chain disruptions, that impacted Daktronics’ ability to fund inventory levels and operations; (ii) as a result, it was probable that some portion of Daktronics’ deferred tax assets would not be realized; (iii) thus, Daktronics was reasonably likely to record a material valuation allowance to its deferred tax assets; (iv) there were material weaknesses in Daktronics’ internal controls over financial reporting related to income taxes; and (v) the foregoing presented liquidity concerns and there was substantial doubt as to Daktronics’ ability to continue as a going concern.
On August 31, 2022, Daktronics reported that it experienced “multiple material supply chain disruptions, labor shortages, and a shutdown of our facilities in Shanghai, China for a significant portion of the quarter.” Daktronics also reported that gross profit as a percentage of net sales was 15%, which was lower compared to 22% a year earlier. Moreover, Daktronics’ operating expenses were $31.3 million, compared to $26.5 million a year earlier. And Daktronics’ operating margin for the first quarter of fiscal 2023 was negative 3.2%, compared to positive 3.9% for the first quarter of fiscal 2022. On this news, Daktronics’ stock price fell by more than 22%.
Then, on December 6, 2022, Daktronics revealed that it would be unable to timely file its Quarterly Report on Form 10-Q for the period ended October 29, 2022, and that there is “substantial doubt” about Daktronics’ ability to continue as a going concern. Daktronics also disclosed that it recorded a valuation allowance of approximately $13.0 million for deferred tax assets, which “created a covenant violation under our line of credit agreement.” As a result, Daktronics “also expects to conclude that its disclosure controls and procedures and internal control over financial reporting were not effective as a result of material weaknesses.” On this news, Daktronics’ stock price fell by more than 39%, further damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Daktronics securities during the Class Period to seek appointment as lead plaintiff in the Daktronics class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Daktronics class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Daktronics class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the Daktronics class action lawsuit.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm is ranked #1 on the most recent ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors in 2021 – more than triple the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 9 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig.