
Lematta vs. Casper Sleep Inc. et al., Complaint in U.S. District Court [pdf] - kudu
http://securities.stanford.edu/filings-documents/1074/CSI1900_19/2020619_f01c_20CV02744.pdf
======
greenyoda
Summary: This is a class action by investors who claim that Casper
misrepresented the profitability and future prospects of the company in their
IPO. The alleged misrepresentations are listed on page 16:

 _The statements identified in ¶¶32-40 were inaccurate statements of material
fact because they failed to disclose the following adverse facts that existed
at the time of the IPO:

(a) that Casper’s profit margins were actually declining, rather than growing;

(b) that Casper was changing an important distribution partner, costing it 130
basis points of gross margin in the first quarter of 2020 alone;

(c) that Casper was holding a glut of old and outdated mattress inventory that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;

(d) that Casper was suffering accelerating losses, further placing its ability
to achieve positive cash flows and profitability out of reach;

(e) that 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;

(f) that, as a result of (a)-(e) above, Casper’s ability to achieve
profitability, implement its growth initiatives, and expand internationally
had been misrepresented in the Registration Statement, 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

(g) that, as a result of (a)-(f) above, Casper’s revenue growth rate was not
sustainable and had not positioned the Company to achieve profitability._

