The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired HEXO Corp. (“HEXO” or the “Company”) (NYSE: HEXO) securities during the period from January 25, 2019 through November 15, 2019 (the “Class Period”). Investors have until January 27, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The lawsuit alleges that Company failed to disclose that: (i) HEXO’s reported inventory was misstated as the Company was failing to write down or write off obsolete product that no longer had value; (ii) HEXO was engaging in channel-stuffing in order to inflate its revenue figures and meet or exceed revenue guidance provided to investors; and (iii) HEXO was cultivating cannabis at its facility in Niagara, Ontario that was not appropriately licensed by Health Canada.
On October 4, 2019, HEXO announced the abrupt and immediate resignation of its CFO. On this news, the price of HEXO shares fell $0.26, or 6.4%, to close at $3.80 per share on October 7, 2019.
On October 10, 2019, HEXO announced that it now expected the Company’s net revenue for the fourth quarter of fiscal 2019 to be approximately $14.5 million to $16.5 million, well below previous guidance of CAD$24.8 million. On this news, the price of HEXO shares fell $0.81, or 22.1%, to close at $2.85 per share on October 10, 2019.
On October 24, 2019, HEXO announced 200 layoffs, which resulted in the subsequent shutting down of several facilities it operated near Niagara Falls, Ontario. On this news, the price of HEXO shares fell $0.07, or 3.0%, to close at $2.25 per share on October 29, 2019.
On November 15, 2019, HEXO announced that, following the Company’s acquisition of Newstrike Brands Ltd., on July 30, 2019, HEXO discovered that it had been growing marijuana in an unlicensed facility in Niagara, Ontario. HEXO ceased cultivation and production in the unlicensed space and notified Health Canada. On this news, the price of HEXO shares fell $0.10, or 5.3%, to close at $1.89 per share on November 15, 2019.
If you acquired HEXO securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at email@example.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.