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Class Action Lawsuit Accuses Tempur-Pedic International (TPX) of Concealing Material Information
Tempur-Pedic International, Inc. (NYSE: TPX) did not disclose to investors that its competitive position had drastically weakened and its outlook for 2012 was weaker than earlier estimates, a class action filed in Kentucky federal court alleges.
The class action complaint was filed on behalf of purchasers of Tempur-Pedic common stock from January 25, 2012 and June 5, 2012.
On May 7, an analyst had revealed that between May 16, 2012 and July 8, 2012, Tempur-Pedic would be discounting its popular Cloud Supreme mattress models ranging by 12 to 17%. In reaction to margin worries, Tempur-Pedic shares fell $8.42 per share, or 14.85%, to close at $48.29 per share. Offering sales discounts is uncharacteristic of Tempur-Pedic and goes against its strategy, which is why the market reacted so negatively, the complaint says.
On June 6, Tempur-Pedic slashed its recently confirmed outlook for full-year net sales by more than 10% and earnings per share by nearly 29%. Tempur-Pedic’s stock price fell another 48.73%, to close at $22.39 per share on June 6, 2012.
Chief Executive Officer Mark Sarvary said, “Sales trends in our North America business during the second quarter have been disappointing and below plan, primarily due to changes in the competitive environment, including an unprecedented number of new competitive product introductions which have been supported by aggressive marketing and promotion.”
If you purchased shares of Tempur-Pedic between January 25, 2012 and June 5, 20122, you may file a motion with the court no later than August 20, 2012, and request that the court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the court must decide that your claim is typical of the claims of other class members and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by your decision of whether or not to serve as a lead plaintiff. You can recover as an absent class member without moving for lead plaintiff. The action discussed here was not filed by Milberg.
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