Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Party City, Hayward, and KeyCorp and Encourages Investors to Contact the Firm
News provided byBragar Eagel & Squire
Sep 17, 2023, 9:00 PM ET
NEW YORK, Sept. 17, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Party City Holdco, Inc. (OTC: PRTY, PRTYQ), Hayward Holdings, Inc. (NYSE: HAYW), and KeyCorp (NYSE: KEY). 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.
Party City Holdco, Inc. (OTC: PRTY, PRTYQ)
Class Period: November 8, 2022 – June 9, 2023
Lead Plaintiff Deadline: October 2, 2023
After trading on January 17, 2023, Party City filed for bankruptcy protection under Chapter 11.
Following this news, Party City's stock price declined by 67% over a two-day span from a closing price of $0.374 on January 17, 2023, to $0.121 on January 19, 2023, a decline of $0.253.
Then, on June 9, 2023, Ernst & Young LLP resigned as the Company's auditor due to a disagreement about Party City's decision not to include a "going concern" warning in its quarterly filing on Form 10-Q for the third quarter 2022.
Following this news, Party City's stock price declined by 22% over the next three trading days from a closing price of $0.046 on June 9, 2023 to $0.036 on June 14, 2023.
According to the lawsuit, throughout he Class Period, the defendants: (1) affirmatively misrepresented that its capital resources “will be adequate to meet our liquidity needs for the next 12 months”; (2) omitted that there was substantial doubt about the Company’s ability to continue as a going concern; (3) downplayed the nature and extent of the Company’s then existing liquidity problems; (4) omitted that the Company’s existing credit facilities were insufficient to satisfy its operational needs and that it was unable to obtain additional loans in the normal course of business and; (5) omitted that there was a material weakness in its internal control over financial reporting. When the true details entered the market, the lawsuit claims that investors suffered damages.
For more information on the Party City class action go to: https://bespc.com/cases/PRTY
Hayward Holdings, Inc. (NYSE: HAYW)
Class Period: October 2, 2023
Lead Plaintiff Deadline: March 2, 2022 – July 27, 2022
On July 28, 2022, Hayward Holdings announced financial results for the second fiscal quarter of 2022, shocking analysts and investors by revealing that Hayward Holdings was expecting its channel partners to reduce their inventory on hand by approximately four to six weeks in the second half of 2022. As a result, Hayward Holdings reduced its 2022 guidance to reflect massive inventory reduction in the second half of the year. Notably, during an earnings call held that same day, defendant CEO Kevin Holleran admitted that the inventory bottleneck traced back to inventory decisions made “at the end of 2021” – i.e., before the Class Period.
As a result, the price of Hayward Holdings common stock fell nearly 24%, damaging investors.
As the Hayward Holdings class action lawsuit alleges, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Hayward Holdings and its management had engaged in a channel-stuffing scheme designed to artificially boost Hayward Holdings’ short-term sales and earnings; (ii) Hayward Holdings had flooded its channel partners with inventory that they did not want or need at a level that far outpaced then-existing consumer demand; (iii) Hayward Holdings’ channel partners were suffering from an inventory glut as a result of the channel-stuffing scheme that would require a massive de-stocking in the second half of 2022; (iv) Hayward Holdings’ channel-stuffing scheme had cannibalized future sales, materially impairing Hayward Holdings’ ability to sell to its customers; (v) the demand for pool equipment had slowed down, which, combined with flooding channel partners with more inventory, led to an inventory glut and the need for these channel partners to reduce inventory levels; and (vi) as a result of the above, Hayward Holdings’ projected 2022 financial results were not achievable and lacked a reasonable basis in fact.
For more information on the Hayward class action go to: https://bespc.com/cases/HAYW
KeyCorp (NYSE: KEY)
Class Period: February 27, 2020 – June 9, 2023
Lead Plaintiff Deadline: October 3, 2023
Key operates as the holding company for KeyBank National Association, which provides various retail and commercial banking products and services in the U.S. One of the Company's principal sources of revenue is net interest income ("NII"), which is calculated as the difference between interest income received on earning assets (such as loans and securities) and loan-related fee income, and interest expense paid on deposits and borrowings.
Key has repeatedly downplayed concerns regarding its liquidity while touting the effectiveness of its long-term liquidity strategy. For example, the Company has repeatedly assured investors that its strong core deposit base, in conjunction other funds, supports the Company's liquidity risk management strategy, and that the Company's liquid asset portfolio, inter alia, exceeds the estimated amount needed to manage through an adverse liquidity event.
On March 6, 2023, Key filed its presentation slides for the 2023 RBC Capital Markets Financial Institutions Conference as an exhibit to a Securities and Exchange Commission filing, wherein the Company disclosed that it had downwardly revised its FY 2023 guidance for NII, stating that it expects FY 2023 NII to rise by 1% to 4% (assuming a cumulative beta in the mid- to high 30s) compared to FY 2022, representing a significant reduction from the Company's prior guidance that FY 2023 NII would rise 6% to 9% compared to FY 2022. The Company attributed this negatively revised guidance to "Deposit Beta and Funding Costs", explaining that "[m]arginal funding costs are increasing with rising market interest rates, and are expected to weigh on [NII.]"
On this news, Key's stock price fell $0.60 per share, or 3.31%, to close at $17.55 per share on March 7, 2023.
On March 13, 2023, following the collapse of Silvergate Bank on March 8, 2023, Silicon Valley Bank on March 10, 2023, and Signature Bank on March 12, 2023, investors grew increasingly concerned about Key's own liquidity. That same day, Odeon Capital Group LLC downgraded the Company's stock to hold from buy and BofA Global Research cut its price target on the Company's stock to $17 from $20.
On this news, Key's stock price fell $6.59 per share, or 40.69%, to close at $11.38 per share on March 13, 2023.
Then, on June 12, 2023, at the Morgan Stanley US Financials, Payments, & CRE Conference, Key's Chief Financial Officer, Defendant Clark H. I. Khayat, disclosed that the Company anticipated Q2 2023 NII to be softer than earlier expected, "based on funding mix and deposit cost pressures." At the same conference, Key's Chairman and Chief Executive Officer, Defendant Christopher M. Gorman, disclosed that clients are demanding higher interest rates on their deposits, and that banks of Key's size are likely facing higher capital and liquidity requirements by regulators.
On this news, Key's stock price fell $0.46 per share, or 4.31%, to close at $10.22 per share on June 12, 2023.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Key downplayed concerns with its liquidity while overstating the effectiveness of its long-term liquidity strategy; (ii) Key overstated its projected NII for the second quarter ("Q2") and full year ("FY") of 2023, as well as related positive NII drivers, while downplaying negative NII drivers; (iii) as a result, Key was likely to negatively revise its previously issued NII guidance; (iv) all the foregoing, once revealed, was likely to negatively impact Key's business, financial results, and reputation; and (v) as a result, Defendants' public statements were materially false and/or misleading at all relevant times.
For more information on the KeyCorp class action go to: https://bespc.com/cases/KEY
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. 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.
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