SAN FRANCISCO--(BUSINESS WIRE)--
The law firm of Lieff Cabraser Heimann & Bernstein, LLP announces that class action litigation has been filed on behalf of investors who purchased the common stock of A.O. Smith Corporation (“A.O. Smith” or the “Company”) (AOS) between July 26, 2016 through May 16, 2019, inclusive (the “Class Period”).
If you purchased the common stock of A.O. Smith during the Class Period, you may move the Court for appointment as lead plaintiff by no later than July 29, 2019. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. Your share of any recovery in the actions will not be affected by your decision of whether to seek appointment as lead plaintiff. You may retain Lieff Cabraser, or other attorneys, as your counsel in the actions.
A.O. Smith investors who wish to learn more about the litigation and how to seek appointment as lead plaintiff should click here or contact Sharon M. Lee of Lieff Cabraser toll-free at 1-800-541-7358.
Background on the A.O. Smith Securities Class Litigation
AOS, incorporated in Delaware and headquartered in Milwaukee, Wisconsin, is a leading manufacturer and marketer of water heaters and boilers. The Company has two primary operating segments, North America and China, the latter of which accounted for one-third of the Company’s sales in 2018, exceeding $1 billion.
The action alleges that, during the Class Period, Defendants made repeated false statements about AOS’s earnings and sales in China, and the prospects for future sales and earnings in that market, artificially inflating the Company’s stock price.
On May 16, 2019, J Capital Research USA LLC (“J Capital”), a research firm with a short interest in AOS stock, released a well-documented, 66-page report, based on extensive interviews and investigation in China, that AOS fueled its Chinese growth through a previously undisclosed Chinese partner named Jiangsu UTP Supply Chain (“UTP”). UTP is purportedly involved in almost every aspect of AOS’s Chinese operations, and may be responsible for as much of 75% of AOS China sales, by allowing AOS to inflate its gross margins though distributor-financed “channel stuffing.” This channel stuffing enabled AOS to report growth that was no longer working, by pushing UTP and distributors to take on more inventory than they needed, which hid AOS’s sales decline. In addition, J Capital revealed that AOS’s claim to have $539 million in unencumbered cash balances in China is likely false, and that AOS probably used that cash for distributor loans to prop up sales.
On the release of J Capital’s May 16, 2019 AOS report, the price of AOS common stock declined $3.02 per share, or 6.27% from a closing price of $48.12 on May 15, 2019, to close at $45.12 per share on May 16, 2019, on elevated trading volume.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP, with offices in San Francisco, New York, and Nashville, is a nationally recognized law firm committed to advancing the rights of investors and promoting corporate responsibility.
The National Law Journal has recognized Lieff Cabraser as one of the nation’s top plaintiffs’ law firms for fourteen years. In compiling the list, the National Law Journal examines recent verdicts and settlements and looked for firms “representing the best qualities of the plaintiffs’ bar and that demonstrated unusual dedication and creativity.” Law360 has selected Lieff Cabraser as one of the Top 50 law firms nationwide for litigation, highlighting our firm’s “laser focus” and noting that our firm routinely finds itself “facing off against some of the largest and strongest defense law firms in the world.” Benchmark Litigation has named Lieff Cabraser one of the “Top 10 Plaintiffs’ Firms in America.”
For more information about Lieff Cabraser and the firm’s representation of investors, please visit http://www.lieffcabraser.com.
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