New York, NY – June 2, 2023 – Today, prominent investor rights law firm Wolf Popper LLP (“Wolf Popper”) filed a class action lawsuit for violation of the federal securities laws in the U.S. District Court for the Western District of Washington against Funko, Inc. (“Funko”) and certain of the Company’s senior executives (collectively, “Defendants”) on behalf of investors who purchased shares of Funko common stock during the period from May 6, 2022 through March 1, 2023, inclusive (the “Class”).
The case is captioned
Jonathan Studen v. Funko, Inc. et al., No. 2:23-cv-00824 (W.D. Wash.). A copy of the complaint is available on Wolf Popper’s website by clicking here.
The complaint alleges that throughout the Class Period Defendants misrepresented to investors facts concerning the move of Funko’s distribution center from Everett, Washington to Buckeye, Arizona as well as the planned upgrade of the Company’s enterprise resource planning (ERP) software system. Defendants repeatedly spoke of the necessity for these upgrades to serve current and future business needs, but failed to disclose that: (1) Funko was experiencing significantly larger delays in implementing its ERP software than it was disclosing to investors; (2) Having moved into a new warehouse without functioning ERP software in place would lead to dramatically higher costs and poorer inventory management practices; and (3) Funko’s inability to efficiently operate the new distribution center would have a substantial, undisclosed impact on the Company’s EBITDA margin.
The truth began to be revealed on November 3, 2022, when, after the market closed, Funko issued a press release announcing results for the third quarter of 2022. The November 3, 2022 press release announced that Funko’s earnings per share had come in at $0.28 per share, more than 42% below street estimates of $0.49 per share, and also that management had dramatically cut Funko’s FY 2022 guidance.
In response to this news, on November 4, 2022, the price of Funko’s common stock fell $11.58 per share to $7.92 or a 59.4% drop on exceptionally heavy volume of 15.197 million shares, more than twelve times the average daily trading volume of Funko’s common stock.
The results of Funko’s rocky distribution center move and ERP implantation continued to impact the Company. On March 1, 2023, Funko issued a press release, reporting results for the fourth quarter 2022.
In response to this news, on March 2, 2023, the price of Funko’s common stock fell intra-day $3.17 per share to $7.53, a 29.6% drop, before recovering somewhat to close down $0.76 per share at $9.94 or a 7.1% drop on exceptionally heavy volume of 4.3 million shares, more than six times the average daily trading volume of Funko’s common stock.
Deadline to Seek Appointment as Lead Plaintiff
If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than August 1, 2023. Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Adam Savett of Wolf Popper at 212-451-9655, or via e-mail at
asavett@wolfpopper.com.
About Wolf Popper
Wolf Popper has successfully recovered billions of dollars for defrauded investors. Wolf Popper’s reputation and expertise have been repeatedly recognized by the courts, which have appointed the firm to major positions in securities litigation. For more information about Wolf Popper, please visit the Firm’s website at
www.wolfpopper.com.
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