Wolf Haldenstein Adler Freeman & Herz, LLP announces that a class action lawsuit has been filed against Tile Shop Holdings, Inc. ("Tile Shop" or the "Company") (NASDAQ:TTS) in United States District Court for the Southern District of New York on behalf of purchasers of common stock and call options and sellers of put options between August 22, 2012 and November 13, 2013, seeking to recover damages for violations of the federal securities laws.
According to the complaint, the Company may have issued materially misleading business information to the investing public, including that it used an undisclosed related party to help perpetuate a scheme to overstate earnings and thus, artificially inflate the price of its stock.
On November 14, 2013, Gotham City Research LLC issued a report alleging that Tile Shop had greatly exaggerated its true financial performance. The report stated that the Company's largest supplier, Beijing Pingxiu ("BP"), is an undisclosed related company secretly controlled by Fumitake Nishi, the brother-in-law of the Company's CEO and a Tile Shop employee; Tile Shop uses BP to overstate inventories, understate cost of sales and overstate gross profits; BP sells goods to the Tile Shop at or near cost to allow Tile Shop to achieve an artificial cost advantage; and Tile Shop's 2013 earnings are overstated by over 200%.
As a result of the release of this report, the price of Tile Shop publicly-traded stock closed on November 14, 2013 at $12.95 per share, down $8.26 for the day, a market capitalization drop of over $400 million.If you are a member of the class, you may, no later than January 14, 2014, request that the Court appoint you as lead plaintiff of the class. If you are a shareholder of Tile Shop (NASDAQ:TTS), have $150,000 or more in losses and would like additional information concerning your shareholder rights in this matter, please contact us at:
|Benjamin Y. Kaufman or Patrick Donovan|
|Wolf Haldenstein Adler Freeman & Herz LLP|
|270 Madison Avenue|
|New York, New York 10016|