NEW YORK, April 9, 2019 /CNW/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Stamps.com, Inc. ("Stamps.com" or the "Company") (NASDAQ: STMP) and certain of its officers and directors. The class action, filed in United States District Court, Central District of California, and indexed under 19-cv-01828, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased, or otherwise acquired, Stamps.com securities between May 3, 2017 and February 21, 2019, inclusive (the "Class Period"). This action is brought on behalf of the Class (as defined below) for violations of §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Stamps securities between May 3, 2017, and February 21, 2019, you have until April 29, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Stamps.com is a provider of Internet-based mailing and shipping solutions in the United States. Under the Stamps.com and Endicia brands, Stamps.com customers use United States Postal Service ("USPS") solutions to mail and ship a variety of mail pieces and packages through the USPS. Customers using Stamps.com solutions receive discounted postage rates compared to USPS.com and USPS retail locations on certain mail pieces.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company's financial results depended on the manipulation of a USPS reseller program that cost USPS an estimated $235 million per year; and (ii) as a result, the Company's business was unsustainable, and its financial results were highly misleading.
The truth emerged on February 21, 2019, after the market closed, when Stamps.com held a conference call to discuss its financial results from the fourth quarter of 2018 and fiscal year 2018 as well as its business outlook and "certain strategic items . . . that impact our business outlook for 2019." On the call, the Company's Chairman and Chief Executive Officer ("CEO"), Kenneth McBride ("McBride"), inexplicably stated that the Company was discontinuing its shipping partnership with USPS—despite the fact that USPS-related business accounts for 87% of the Company's revenue. The Company further announced that, contrary to previous expectations of strong growth, 2019 revenue was expected to decline 5.4%. On this news, the Company's stock plummeted to a close price of $83.65 on February 21, 2019, a decline of over 57% from the previous close price of $198.08.
On February 26, 2019, it was reported that, contrary to McBride's representations, USPS itself had decided to terminate its relationship with Stamps.com in the face of the Company's increasing demands and abuse of the USPS's reseller program.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 9980
SOURCE Pomerantz LLP