NEW YORK, March 18, 2020 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class action lawsuits have been commenced on behalf of stockholders of Six Flags Entertainment Corporation (NYSE: SIX), Luckin Coffee, Inc. (NASDAQ: LK), Southwest Airlines Co. (NYSE: LUV), and CPI Aerostructures, Inc. (NYSE: CVU). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Six Flags Entertainment Corporation (NYSE: SIX)
Class Period: April 25, 2018 to January 9, 2020
Lead Plaintiff Deadline: April 13, 2020
On June 23, 2014, Six Flags announced the signing of an agreement to build multiple Six Flags-branded theme parks in China. Six Flags partnered exclusively with Riverside Investment Group Co. Ltd. (“Riverside”), a Chinese real estate developer, that would provide the capital investment for future developments in China. The Company emphasized expansion of its international licensing agreements as one of its key strategies to achieve revenue growth, and Six Flags’ agreements with Riverside to develop parks in China were of particular importance to investors because they represented the largest potential driver of growth in this strategic initiative. By May 29, 2018, Six Flags had announced plans with Riverside to develop 11 parks across three locations in China.
The complaint, filed on February 12, 2020, alleges that throughout the Class Period, defendants made materially false and misleading statements, as well as failed to disclose material adverse facts, regarding the Company’s business operations, and growth prospects. Specifically, defendants touted its business relationship with Riverside as an “incredible partnership” that “should supercharge revenue growth.” The Company also stated that Riverside would “work through” the macroeconomic issues that it faced in China and represented that delays in the development of its Six Flags-branded parks in China were “short term” and the resulting weakened revenue patterns were “not material in the context of the long term opportunity.” These and similar statements during the Class Period were false and misleading because defendants knew or recklessly disregarded that its licensing agreements with Riverside would not result in the benefits that defendants had publicly represented. As a result of these misrepresentations, shares of Six Flags’ common stock traded at artificially inflated prices during the Class Period.
The truth began to emerge on February 14, 2019, when the Company surprised investors by announcing a negative revenue adjustment of $15 million in the fourth quarter of 2018 related to the Company’s agreements with Riverside due to delays in the expected opening dates of some of the parks in China, which the Company blamed on macroeconomic issues in China. As a result, Six Flags reported a 38% decline in the Company’s sponsorship, international agreements and accommodations revenue compared to the fourth quarter of 2017. Six Flags also told investors that it expected weaker than anticipated quarterly revenue from its agreements with Riverside in 2019 and 2020.
On this news, the Company’s stock price dropped over 14%, from $63.87 per share to $54.87 per share.
On October 23, 2019, Six Flags again postponed the timing of its park openings in China, stating that “there’s a very high likelihood going forward that we will see changes in the timing of park openings” and “it’s unrealistic to think it’s going to be exactly as we’ve outlined.” As a result, the Company reported a 26% decline in sponsorship, international agreements and accommodations revenue for the third quarter of 2019 compared to the third quarter of 2018.
On this news, Six Flags’ stock price further declined from $51.23 per share to $44.88 per share, a decline of more than 12%.
Then, on January 10, 2020, the Company revealed that the future of its China projects was in jeopardy. In particular, the Company announced that the development of the Six Flags-branded parks in China continued to encounter challenges and had not progressed as expected. The Company also reported that Riverside continued to face significant challenges due to the macroeconomic environment and declining real estate market in China, which caused Riverside to default on its payment obligations to Six Flags. Furthermore, the Company told investors that, in the fourth quarter of 2019, it would realize no revenue from its agreements with Riverside and expected a negative $1 million revenue adjustment related to those agreements. The Company also announced one-time charges totaling approximately $10 million related to Riverside’s default.
On this news, Six Flags’ stock price fell again from $43.76 per share to $35.96 per share, or nearly 18%.
For more information on the Six Flags class action go to: https://bespc.com/six
Luckin Coffee, Inc. (NASDAQ: LK)
Class Period: November 13, 2019 to January 31, 2020
Lead Plaintiff Deadline: April 13, 2020
On January 31, 2020, Muddy Waters Research published an anonymous report alleging that Luckin had fabricated some of the Company’s financial performance metrics, beginning in the third quarter of 2019 (“3Q19”) (the “Muddy Waters Report”). The Muddy Waters Report purported to cite “smoking gun evidence,” including, thousands of hours of store video, thousands of customer receipts, and diligent monitoring of the Company’s mobile application metrics, which allegedly showed that, since 3Q19, Luckin had inflated its per-store per-day sales figures, its net selling price per item, its advertising expenses, and its revenue contribution from “other products.”
On this news, Luckin’s share price fell $3.91 per share, or over 10%, to close at $32.49 per share on January 31, 2020.
The Complaint, filed on February 13, 2020, alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the company’s business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) certain of Luckin’s financial performance metrics, including per-store per-day sales, net selling price per item, advertising expenses, and revenue contribution from “other products” were inflated; (ii) Luckin’s financial results thus overstated the Company’s financial health and were consequently unreliable; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
For more information on the Luckin Coffee class action go to: https://bespc.com/lk
Southwest Airlines Co. (NYSE: LUV)
Class Period: February 7, 2017 to June 25, 2019
Lead Plaintiff Deadline: April 20, 2020
The complaint, filed on February 19, 2020, alleges that throughout the Class Period defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) Southwest’s operations were non-compliant with government maintenance and safety regulations; (ii) the foregoing issues were exacerbated by Southwest’s undue influence over FAA officials and, consequently, lax regulatory oversight of the Company’s operations; (iii) all of the foregoing significantly increased the safety risks to passengers traveling on Southwest flights and heightened governmental scrutiny into the Company; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On April 17, 2018, news sources reported that a Southwest plane had blown an engine, which exploded and caused shrapnel to strike the plane. The explosion resulted in the death of one passenger, who was partially pulled through a large hole as the cabin suffered rapid decompression, and injured seven others. According to the Chairman of the National Transportation Safety Board, the incident marked “the first passenger fatality in a U.S. airline accident since 2009,” and that, out of twenty-four fan blades in the engine at issue, one was missing.
On this news, Southwest’s stock price fell $0.62 per share, or 1.13%, to close at $54.27 per share on April 17, 2018.
On April 19, 2018, the FAA announced that it would “order inspections of at least 220 aircraft engines as investigators are focusing on a broken fan blade in an engine that exploded.” According to news sources, the order was initially proposed in August 2016, following the earlier incident in which engine failure had also resulted from a broken fan blade. Critics also reportedly questioned why the FAA had not acted sooner in conjunction with their European counterparts.
On this news, Southwest’s stock price fell $1.02 per share, or 1.83%, to close at $54.80 per share on April 19, 2018.
On June 21, 2018, news sources reported that eight passengers were suing Southwest in connection with the engine explosion in April 2018.
On this news, Southwest’s stock price fell $1.24 per share, or 2.33%, to close at $51.91 per share on June 22, 2018.
Finally, on June 25, 2019, the Wall Street Journal published an article entitled “FAA Reassigns Senior Managers in Office Overseeing Southwest Airlines,” which reported that the FAA had “removed three senior managers in the office overseeing Southwest Airlines Co., amid allegations of lax safety enforcement raised by agency whistleblowers and various resulting government inquiries.” The article also noted that “[t]he [DOT]’s inspector-general has been looking into some of the safety issues for many months . . . including lapses by the airline in documenting maintenance for more than 100 of its jets,” as well as “failures to reliably compute the weight of checked baggage and hazardous landing incidents in which one aircraft smacked a wingtip on the tarmac and another ran off the strip in stormy weather.”
On this news, Southwest’s stock price fell $0.30 per share, or 0.59%, to close at $50.70 per share on June 26, 2019.
For more information on the Southwest Airlines class action go to: https://bespc.com/luv
CPI Aerostructures, Inc. (NYSE: CVU)
Class Period: March 15, 2018 and February 14, 2020
Lead Plaintiff Deadline: April 24, 2020
On February 14, 2020, CPI announced that its financial statements for fiscal year 2018, the last three quarters of 2018, and the first two quarters of 2019 should no longer be relied upon due to errors in those financial statements relating to the Company's recognition of revenue from contracts with customers under ASC Topic 606.
In addition, the Company announced that investors should no longer rely upon the independent auditor’s reports on the effectiveness of internal control over financial reporting for the year ended December 31, 2018, as well as management’s reports on the effectiveness of internal control over financial reporting, press releases, and investor communications describing the Company’s financial statements for these periods. The Company also announced the resignation of its Chief Financial Officer.
On this news, CPI’s share price dropped sharply, to close at $4.87 per share.
The complaint, filed on February 24, 2020, alleges that throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) CPI Aerostructures’ financial statements included in the Company’s Forms 10-Q for the first, second, and third quarters of 2018 and 2019 incorrectly applied generally accepted accounting principles and thus revenue, net income, retained earnings, and contract assets were overstated; (2) as a result, the financial statements included in the Form 10-Qs for 2018 and 2019 and the annual report on Form 10-K for 2018 could no longer be relied upon and required restatement; (3) CPI Aerostructures lacked adequate internal controls over financial reporting and effective disclosure controls and procedures as of the period during each reporting period of 2018; (4) CPI Aerostructures lacked effective disclosure controls and procedures during the third quarter of 2019; and (5) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
For more information on the CPI Aerostructures class action go to: https://bespc.com/CVU-2
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Melissa Fortunato, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com