Hagens Berman Sobol Shapiro LLP, a national investor-rights law firm, reminds investors of the Jan. 14, 2014 deadline to move to be a lead plaintiff in the securities fraud class-action lawsuit filed against Tile Shop Holdings, Inc. (“Tile Shop”) (NASDAQ: TTS) and the continued investigation into whether TTS dramatically overstated earnings and failed to disclose that Beijing Pingxiu, the company’s largest supplier, was secretly controlled by the brother-in-law of Tile Shop’s CEO. Investors who have suffered significant financial losses may contact a Hagens Berman attorney working on the investigation by emailing TTS@hbsslaw.com.
The class-action securities fraud suit was filed on behalf of investors who purchased Tile Shop securities between Aug. 22, 2012, and Nov. 13, 2013. Investors with significant losses may contact Hagens Berman Partner Reed Kathrein, who is leading the firm’s investigation, by calling (510) 725-3000. Additional information is available at http://hb-securities.com/investigations/TTS.
The investigation centers around allegations made in a report published by short-seller firm Gotham City Research LLC on Nov. 14, 2013. The report claimed that:
- Tile Shop overstated its earnings in 2013 by more than 200 percent.
- Beijing Pingxiu (BP), the company’s largest supplier, was related to Tile Shop, in that BP is secretly controlled by the brother-in-law of Tile Shop’s CEO.
- Tile Shop used BP to exaggerate its inventory and profits, purchasing goods at or near cost.
Gotham City’s report concluded that Tile Shop will be forced to restate the past several years’ financial results, and that Tile Shop shares were dramatically overvalued.Following the release of the report, Tile Shop’s stock price fell from a close of $21.22 on Nov. 13, 2013, to a close of $12.95 the next day. Following the price drop, Citigroup downgraded the company’s rating from buy to neutral on Nov. 18, 2013.