Quad/Graphics, Inc. Class Action Lawsuit
- Company Name
- Quad/Graphics, Inc.
- Stock Symbol
- Class Period
- February 21, 2018 to October 29, 2019
- Southern District of New York
On November 7, 2019, the Quad/Graphics, Inc. class action lawsuit was filed charging Quad/Graphics and certain of its officers with violations of the Securities Exchange Act of 1934. The Quad/Graphics class action lawsuit was commenced in the Southern District of New York on behalf of purchasers of Quad securities between February 21, 2018 and October 29, 2019 (the “Class Period”) and is captioned Born v. Quad/Graphics, Inc., et al., No. 19-cv-10376.
Quad/Graphics provides a data-driven integrated marketing solutions platform to help clients reduce complexity, increase efficiency, and enhance marketing spend effectiveness. According to Quad/Graphics, it uses its data-driven print expertise to help clients plan, produce, deploy, and manage marketing programs across traditional and digital channels.
The Quad/Graphics class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about Quad/Graphics’ business, operations, and prospects. Specifically, defendants failed to disclose that Quad/Graphics’ book business in the United States was underperforming, which made it likely that Quad/Graphics would divest itself of its book business, and that Quad/Graphics was unreasonably vulnerable to decreases in market prices and, in order to remain financially flexible while market prices decreased, Quad/Graphics was likely to cut its quarterly dividend and expand its cost reduction programs. As a result of this information being withheld from the market, Quad/Graphics securities trade at artificially inflated prices during the Class Period, with the price of Quad/Graphics’ stock reaching a high of more than $30 per share.
Then on October 29, 2019, after the market closed, Quad/Graphics announced disappointing third quarter 2019 financial results, slashing its quarterly dividend to $0.15 per share, announcing plans to divest its book business, and reducing its 2019 guidance. Analysts were “absolutely shocked by these developments given the confidence management had just three months ago.” On October 30, 2019, defendants held a conference call to discuss the results, blaming Quad/Graphics’ disappointing performance on “lower market prices of paper byproduct recoveries,” which would “impact full year 2019 adjusted EBITDA by at least $25 million.” On this news, Quad/Graphics’ stock price fell $6.42 per share, or nearly 57%, to close at $4.85 per share on October 30, 2019.
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