According to the law firm press release, the complaint charges Tempur Sealy and certain of its officers with violations of the Securities Exchange Act of 1934. Tempur Sealy develops, manufactures, and distributes bedding products worldwide.
Specifically, the complaint alleges that during the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding Tempur Sealy's business and prospects, including, among other things: (i) that prior to and during the Class Period, Mattress Firm Holding Corp. ("Mattress Firm"), the Company's largest customer which accounted for approximately 25% of the Tempur Sealy's 2015 net sales, had been engaged in active negotiations to be acquired and that any such acquisition was reasonably likely to have a material adverse effect in Tempur Sealy's 2016 third and fourth quarter operating results; (ii) that during the Class Period, Tempur Sealy was engaged in active discussions with Mattress Firm concerning modifications to their long-term supply agreements; (iii) that Mattress Firm had been seeking significant economic concessions from Tempur Sealy during the Class Period; (iv) that defendants lacked a reasonable basis for the Company's positive statements associated with Mattress Firm; and (iv) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about Tempur Sealy's then-current business and future financial prospects.
On January 27, 2017, Tempur Sealy announced that it would cease doing business with Mattress Firm during the first quarter of 2017. In response to this news, the complaint alleges, the price of Tempur Sealy common stock plummeted $20.19 per share over a two-day period, or nearly 32%, to close at $43.00 per share on January 31, 2017.
The Complaint further alleges that defendants were motivated to engage in the course of conduct alleged therein to allow Company insiders to sell more than $8.2 million of Tempur Sealy common stock at artificially inflated prices during the Class Period.
On June 22, 2017, the Court issued an Order consolidating cases and appointing Lead Plaintiff and Counsel. Lead Plaintiff filed a consolidated Complaint on August 7. Defendants filed a Motion to Dismiss the consolidated Complaint on October 5. On March 26, 2019, the Court issued an Order granting Defendants' Motion to Dismiss.