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MGP Ingredients (MGPI) faces a securities class action lawsuit regarding alleged false statements about its business and product demand between May 4, 2023, and October 30, 2024. The lawsuit claims MGPI executives misled investors about inventory issues and product demand strength.
The truth emerged in multiple stages: On February 22, 2024, MGPI issued below-consensus 2024 revenue guidance, citing wholesale inventory destocking issues, causing a 15% stock drop. On October 17, 2024, MGPI revealed soft demand and high inventories, leading to a 30% stock decline. Finally, on October 31, 2024, the company announced whiskey production scaling down and inventory challenges, resulting in another 15% stock price drop to $48.04.
MGP Ingredients (MGPI) è coinvolta in una causa legale collettiva per titoli riguardante presunti falsi dichiarazioni sulla propria attività e sulla domanda dei prodotti tra il 4 maggio 2023 e il 30 ottobre 2024. La causa afferma che i dirigenti di MGPI hanno ingannato gli investitori riguardo a problemi di inventario e alla solidità della domanda dei prodotti.
La verità è emersa in più fasi: il 22 febbraio 2024, MGPI ha emesso previsioni di entrate per il 2024 al di sotto delle attese, citando problemi di de-stoccaggio dell’inventario all’ingrosso, causando un calo del 15% delle azioni. Il 17 ottobre 2024, MGPI ha rivelato una domanda debole e alti livelli di inventario, comportando una declino del 30% delle azioni. Infine, il 31 ottobre 2024, l’azienda ha annunciato una riduzione della produzione di whisky e problemi di inventario, portando a un ulteriore calo del 15% del prezzo delle azioni a $48,04.
MGP Ingredients (MGPI) enfrenta una demanda colectiva de valores relacionada con supuestas declaraciones falsas sobre su negocio y la demanda de productos entre el 4 de mayo de 2023 y el 30 de octubre de 2024. La demanda alega que los ejecutivos de MGPI engañaron a los inversionistas sobre problemas de inventario y la fortaleza de la demanda de productos.
La verdad surgió en varias etapas: el 22 de febrero de 2024, MGPI emitió una guía de ingresos para 2024 por debajo del consenso, citando problemas de desabastecimiento de inventario al por mayor, lo que provocó una caída del 15% en las acciones. El 17 de octubre de 2024, MGPI reveló una demanda débil y altos inventarios, lo que condujo a un declive del 30% en las acciones. Finalmente, el 31 de octubre de 2024, la empresa anunció la reducción de la producción de whisky y los desafíos de inventario, resultando en otra caída del 15% en el precio de las acciones hasta $48.04.
MGP 재료 (MGPI)는 2023년 5월 4일부터 2024년 10월 30일 사이에 비즈니스 및 제품 수요에 대한 허위 진술과 관련된 증권 집단 소송에 직면해 있습니다. 이 소송은 MGPI 경영진이 재고 문제와 제품 수요의 강도에 대해 투자자들을 잘못 인도했다고 주장합니다.
진실은 여러 단계에서 드러났습니다: 2024년 2월 22일, MGPI는 도매 재고 감소 문제를 언급하며 합의치 이하의 2024년 수익 가이던스를 발표하여 15% 주가 하락을 초래했습니다. 2024년 10월 17일, MGPI는 낮은 수요와 높은 재고를 공개하여 30% 주가 하락으로 이어졌습니다. 마지막으로 2024년 10월 31일, 회사는 위스키 생산 축소와 재고 문제를 발표하여 또 한 번 15%의 주가 하락을 가져와 $48.04로 떨어졌습니다.
MGP Ingredients (MGPI) est confronté à un recours collectif en valeurs mobilières concernant des déclarations mensongères sur son activité et la demande de produits entre le 4 mai 2023 et le 30 octobre 2024. Le recours affirme que les dirigeants de MGPI ont induit en erreur les investisseurs sur les problèmes d’inventaire et la solidité de la demande des produits.
La vérité est apparue en plusieurs étapes : le 22 février 2024, MGPI a émis des prévisions de revenus pour 2024 inférieures aux attentes, évoquant des problèmes de déstockage de l’inventaire en gros, entraînant une chute de 15% de l’action. Le 17 octobre 2024, MGPI a révélé une demande faible et des niveaux d’inventaire élevés, ce qui a conduit à une baisse de 30% de l’action. Enfin, le 31 octobre 2024, l’entreprise a annoncé une réduction de la production de whisky et des défis d’inventaire, ce qui a entraîné une nouvelle baisse de 15% du prix de l’action à 48,04 $.
MGP Ingredients (MGPI) sieht sich einer Sammelklage wegen Wertpapieren gegenüber, die fälschliche Aussagen über sein Geschäft und die Produktnachfrage zwischen dem 4. Mai 2023 und dem 30. Oktober 2024 betreffen. Die Klage behauptet, dass die Führungskräfte von MGPI die Investoren über Lagerprobleme und die Stärke der Produktnachfrage in die Irre geführt haben.
Die Wahrheit kam in mehreren Phasen ans Licht: Am 22. Februar 2024 gab MGPI eine Umsatzprognose für 2024 ab, die unter den Erwartungen lag, und verwies auf Probleme mit dem Abbauf von Großhandelsbeständen, was zu einem Rückgang der Aktien um 15% führte. Am 17. Oktober 2024 offenbarte MGPI eine schwache Nachfrage und hohe Bestände, was zu einem Rückgang der Aktien um 30% führte. Schließlich gab das Unternehmen am 31. Oktober 2024 bekannt, die Whiskey-Produktion herunterzufahren und mit Herausforderungen bei den Beständen konfrontiert zu sein, was zu einem weiteren Rückgang des Aktienkurses um 15% auf $48,04 führte.
Negative
- Stock price dropped 15% to $78.14 following below-consensus 2024 revenue guidance
- Stock declined 30% to $57.50 after revealing soft demand and high inventory issues
- Additional 15% stock price drop to $48.04 following whiskey production reduction announcement
- Company facing inventory destocking challenges at wholesale level
- Forced to scale down whiskey production due to market conditions
Insights
This securities class action lawsuit against MGPI highlights serious allegations of misleading statements regarding inventory levels and product demand. The complaint spans from May 2023 to October 2024, where executives allegedly misrepresented the company’s business conditions. The sequential revelations of truth through multiple disclosures caused significant stock price drops: $13.65 (15%) in February, $24.07 (30%) in October and another $8.27 (15%) by month-end. The total market value erosion exceeds 60% from peak levels. The legal implications are substantial – this type of case typically settles for 2-5% of investor losses. The February 14, 2025 lead plaintiff deadline gives institutional investors time to evaluate their losses and consider taking an active role in the litigation.
The inventory destocking issue reveals deeper structural problems in the spirits industry post-COVID. The pandemic-driven demand surge created artificial growth expectations, leading to overproduction across the sector. MGPI’s case is particularly concerning because whiskey requires significant aging, meaning production decisions have long-term implications. The forced production scale-down indicates a severe miscalculation of market dynamics. Looking at wholesale inventory levels, this correction could extend through 2024-2025, pressuring margins and cash flow. For context, major spirits companies are reporting similar challenges, suggesting an industry-wide recalibration rather than company-specific issues. The multiple downward revisions to guidance indicate management’s initial reluctance to acknowledge the full scope of these challenges, damaging credibility with investors.
SAN FRANCISCO, CA / ACCESSWIRE / December 24, 2024 / National plaintiffs law firm Lieff Cabraser Heimann & Bernstein, LLP encourages investors in MGP Ingredients, Inc. (“MGPI” or the “Company”) (NASDAQ:MGPI) who purchased or otherwise acquired MGPI common stock between May 4, 2023, and October 30, 2024, inclusive (the “Class Period”) to contact us immediately regarding a pending securities class action against MGPI. The deadline to apply to be lead plaintiff is February 14, 2025.
Class Period: May 4, 2023 – October 30, 2024
Lead Plaintiff Motion Deadline: February 14, 2025
Case information: https://www.lieffcabraser.com/securities/mgpi/
Contact us: Email or text investorinfo@lchb.com or call 1-800-541-7358
MGPI, incorporated and headquartered in Atchison, Kansas, manufactures, distills, and sells alcoholic beverages such as tequila, bourbon, rye, and other whiskeys, as well as grain-neutral spirits such as vodka and gin. Demand for liquor, hard liquor in particular, rose in 2020 due to the COVID-19 pandemic.
The action alleges that, throughout the Class Period, MGPI and certain of its senior executives made materially false and misleading statements regarding the Company’s business and demand for its liquor products. Specifically, Defendants falsely and repeatedly assured investors that the Company was not facing excess inventory issues and demand for its products remained strong.
On February 22, 2024, the truth began to emerge. The Company issued full-year 2024 revenue guidance that was below industry consensus and noted that “inventory destocking at a wholesale level will remain an issue for the branded spirits industry in 2024.” The Company’s new CEO and President assured that the Company had worked hard to manage wholesale inventory levels and that demand for its products remained healthy. Following this news, MGPI’s common stock price fell by $13.65 per share, or nearly 15%, to close at $78.14 per share on February 22, 2024.
On October 17, 2024, MGPI revealed that soft demand and high inventories were in fact undermining its sales. On this news, MGPI’s stock price declined by $24.07, or nearly 30%, over the next three trading days to close at $57.50 on October 22, 2024.
Finally, on October 31, 2024, the Company stated that it would have to “scale down our whiskey production” and that “further inventory tightening is a headwind in the near term.” On this news, MGPI’s stock price declined by another $8.27, or nearly 15%, to a closing price of $48.04 on October 31, 2024.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP, with over 125 attorneys in offices in San Francisco, New York, Nashville, and Munich, Germany, is an internationally-recognized law firm committed to advancing the rights of investors and promoting corporate responsibility. Repeatedly recognized as a “Plaintiffs’ Powerhouse” by Law360, Lieff Cabraser has litigated some of the most important civil cases in the United States, and has assisted clients in recovering over $129 billion in verdicts and settlements. For over 50 years, Lieff Cabraser has remained committed to ensuring access to justice for all.
Source/Contact
Sharon Lee
Lieff Cabraser Heimann & Bernstein, LLP
415 956-1000
slee@lchb.com
SOURCE: Lieff Cabraser Heimann & Bernstein
View the original press release on accesswire.com
FAQ
What are the key dates for the MGPI securities class action lawsuit?
The class period is from May 4, 2023, to October 30, 2024, and the deadline to apply as lead plaintiff is February 14, 2025.
How much did MGPI stock drop after the February 22, 2024 announcement?
MGPI stock dropped $13.65 per share (nearly 15%) to close at $78.14 following the February 22, 2024 announcement of below-consensus revenue guidance.
What caused MGPI’s stock to fall 30% in October 2024?
MGPI’s stock fell 30% after the October 17, 2024 revelation of soft demand and high inventory issues, declining $24.07 to close at $57.50 on October 22, 2024.
What was MGPI’s final stock price after the October 31, 2024 announcement?
After the October 31, 2024 announcement about scaling down whiskey production, MGPI’s stock price fell $8.27 to close at $48.04.
What are the main allegations in the MGPI securities class action?
The lawsuit alleges that MGPI and its executives made false and misleading statements about the company’s business, particularly regarding inventory issues and product demand strength.
