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Casper Sleep Inc.

(NYSE: CSPR)

Summary

Attention investors who purchased shares of Casper Sleep Inc. between in or traceable to the Company‚Äôs public offering conducted on or around February 7, 2020 and {{period_end}}:

Rigrodsky & Long is investigating claims brought in a securities fraud class action complaint against Casper Sleep Inc. ("Casper" or the "Company") concerning whether Casper and certain of the Company's directors and/or officers made materially false and misleading statements and failed to disclose materially adverse facts in connection with the Company's February 7, 2020 initial public offering (the "Class Period"), concerning Casper's business, operations, and prospects. These misrepresentations and omissions artificially inflated the price of Casper's shares throughout the Class Period.

Press Release

Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the Eastern District of New York on behalf of all persons or entities that purchased the common stock of Casper Sleep Inc. (“Casper” or the “Company”) (NYSE: CSPR) in or traceable to the Company’s public offering conducted on or around February 7, 2020 (“IPO”), alleging violations of the Securities Exchange Act of 1933 against the Company, the sponsors of the IPO, and certain of the Company’s officers (the “Complaint”).

If you purchased shares of Casper in connection with the IPO and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Seth D. Rigrodsky or Timothy J. MacFall at Rigrodsky & Long, P.A., 300 Delaware Avenue, Suite 1220, Wilmington, DE 19801, by telephone at (888) 969-4242, by e-mail at info@rl-legal.com.

The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s business, operations and prospects.  Specifically, the Complaint alleges that the defendants concealed from the investing public that: (1) Casper’s profit margins were actually declining, rather than growing; (2) Casper was changing an important distribution partner, costing it 130 basis points of gross margin in the first quarter of 2020 alone; (3) Casper was holding a glut of old and outdated mattress inventory that it was selling at steeply discounted clearance prices, further impairing the Company’s profitability; (4) Casper was suffering accelerating losses, further placing its ability to achieve positive cash flows and profitability out of reach; (5) Casper’s core operations were not profitable, but were causing the Company to suffer over $40 million in negative cash flows during the first quarter of 2020 alone and doubling its quarterly net loss year over year; (6) as a result of the foregoing, Casper’s ability to achieve profitability, implement its growth initiatives, and expand internationally had been misrepresented in the Offering Documents, as the Company needed to shutter its European operations, halt all international expansion, jettison over one fifth of its global corporate workforce, and significantly curtail new store openings in order to avoid an imminent cash and liquidity crisis, let alone achieve positive operating cash flows; and (7) as a result of the foregoing, Casper’s revenue growth rate was not sustainable and had not positioned the Company to achieve profitability.  As a result of defendants’ alleged false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.

According to the Complaint, on January 10, 2020, the Company filed its Registration Statement on Form S-l for the IPO, which, after several amendments, was declared effective by the SEC on February 5, 2020 (the “Registration Statement”).  On February 7, 2020, Casper filed its Prospectus on Form 424B4 with the SEC.  In the IPO, defendants sold 8.35 million shares of Casper common stock at $12 per share, generating over $100 million in gross proceeds.

Then, on April 21, 2020, Casper announced that it was taking significant actions to improve its cash position and business model, notwithstanding the fact that the Company had raised more than $100 million in gross offering proceeds from the IPO less than three months previously.  The Company stated that it was reducing the size of its global operations and sales team and completely winding down its European operations, leading to the loss of 21% of its entire corporate workforce globally.  These drastic measures were necessitated by the Company’s ballooning losses and deteriorating cash position.  The Company also stated that defendant Macfarlane, the Company’s CFO and COO, was resigning – an extraordinary move so soon after the IPO.

On May 12, 2020, Casper issued a release providing its financial results for the quarter ended March 31, 2020 – the same quarter during which defendants conducted the IPO.  The Company stated that it had suffered a net loss of $34.5 million, a 98% increase year over year, and an adjusted EBITDA loss of $22.9 million, a 60% increase year over year.  In addition, the Company stated that its gross margin had actually fallen during the quarter by 190 basis points.

As of market close on June 4, 2020, Casper stock was trading at just $8.18 per share, 32% below the IPO price.

If you wish to serve as lead plaintiff, you must move the Court no later than August 18, 2019.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

Rigrodsky & Long, P.A., with offices in Delaware and New York, has recovered hundreds of millions of dollars on behalf of investors and achieved substantial corporate governance reforms in numerous cases nationwide, including federal securities fraud actions, shareholder class actions, and shareholder derivative actions. 

Attorney advertising.  Prior results do not guarantee a similar outcome.

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