BENSALEM, Pa., July 23, 2019 (GLOBE NEWSWIRE) -- Law Offices of Howard G. Smith reminds investors of the upcoming July 29, 2019 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased A.O. Smith Corporation (“A.O. Smith” or the “Company”) (NYSE: AOS) securities between July 26, 2016 and May 16, 2019, inclusive (the “Class Period”).
Investors suffering losses on their A.O. Smith investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.
On May 16, 2019, J Capital Research published a report raising questions about A.O. Smith’s revenue from China as well as its access to $539 million—or about 84% of the Company’s total cash at year end 2018—sitting in China.
On this news, the Company’s share price fell sharply during intraday trading, thereby injuring investors.
The complaint filed in this class action 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 failed to disclose to investors: (1) that the Company had undisclosed business connections and entanglements with UTP through which it funneled up to 75% of its China product sales; (2) that the Company had used UTP to engage in channel stuffing by artificially inflating inventories purportedly sold through distributors that were not based on consumer demand, thereby approximately doubling the normal level of inventory at such distributors; (3) that the Company had used its UTP relationship to artificially inflate the sales figures it reported to investors by as much as 8% and to conceal worsening sales trends that the Company was experiencing in China; (4) that the Company’s sales growth had been primarily in lower margin products as its higher priced products were being undercut by competition in “second-tier” Chinese cities, causing the Company to experience significant market pressures; (5) that the Company had increased its cash reserves in China to over $530 million in furtherance of its channel stuffing and sales manipulation scheme, encumbering the Company’s ability to repatriate the cash for use it for capital expenditures; and (6) as a result, the Company’s public statements were materially false and misleading at all relevant times.
If you purchased shares of A.O. Smith during the Class Period you may move the Court no later than July 29, 2019 to ask the Court to appoint you as lead plaintiff if you meet certain legal requirements. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
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Contacts
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
215-638-4847
888-638-4847
howardsmith@howardsmithlaw.com
www.howardsmithlaw.com