FUNKO, INC. INVESTOR ALERT: Edelson Lechtzin LLP Urges Funko, Inc. (NASDAQ: FNKO) Shareholders with Substantial Losses to Retain Counsel in the Securities Fraud Class Action
NEWTOWN, PA, June 12, 2023 — The law firm of Edelson Lechtzin LLP is investigating securities fraud claims on behalf of all purchasers and holders of Funko, Inc. (“Funko”) (NASDAQ: VIRT) common stock between March 1, 2019, and April 28, 2023, both dates inclusive (the “Class Period”).
Investors who purchased Funko, Inc. common stock may move the U.S. District Court for the Western District of Washington to appoint them as lead plaintiff, no later than August 1, 2023. Continuous holders of Funko stock may pursue corporate governance reforms. Please contact Edelson Lechtzin LLP at 844-696-7492 to discuss your investment losses, or by e-mail at [email protected]. A copy of the class action complaint can be viewed HERE.
Background on Funko, Inc.
Headquartered in Everett, WA, Funko is an American manufacturer of licensed and limited pop culture collectibles, including vinyl figures, action toys, plush, accessories, apparel, and homewares related to movies, TV shows, video games, music, and sports.
The Securities Fraud Claims
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false statements and/or failed to disclose that: (i) Funko was experiencing significantly greater delays in implementing its ERP software than it was disclosing to investors; (ii) Having moved into a new warehouse without functioning ERP software in place would lead to dramatically higher costs and poor inventory management practices; and (iii) Funko’s inability to efficiently operate its new distribution center would have a substantial, undisclosed impact on the Company’s EBITDA margin.
On November 3, 2022, after the markets had closed, Funko announced its 3Q 2022 results. Notably, earnings of $0.28 per diluted share were more than 42% lower than the Street’s estimate of $0.49 per diluted share. Funko also dramatically lowered its FY 2022 guidance. On this news, Funko’s stock price fell $11.58 per share to $7.92 (a 59.4% drop), on November 4, 2022.
On March 1, 2023, after the market closed, Funko announced its financial results for FY 2022 and FY 2023 guidance. Unfortunately, the company experienced a $5.2 million loss in net income for FY 2022, with a decrease in its Adjusted EBITDA margin to 7.4%. Additionally, the Adjusted Earnings per Diluted Share fell short of previous estimates, coming in at $0.57 per share. In response to this news, Funko’s stock price fell from $10.70 per share to $7.53 per share (a 29.6% drop) in after-hours trading on March 1, 2023.
For more information, please contact:
Marc H. Edelson, Esq.
Eric Lechtzin, Esq.
EDELSON LECHTZIN LLP
411 S. State Street, Suite N-300
Newtown, PA 18940
Phone: 844-696-7492 or 215-867-2399 ext. 1
Email: [email protected]
Email: [email protected]
Web: www.edelson-law.com
Edelson Lechtzin LLP is a national class action law firm with offices in Pennsylvania and California. In addition to cases involving securities and investment fraud, our lawyers focus on class and collective litigation in cases alleging violations of the federal antitrust laws, employee benefit plans under ERISA, wage theft and unpaid overtime, consumer fraud, and dangerous and defective drugs and medical devices.
This press release may be considered Attorney Advertising in some jurisdictions. No class has been certified in this case, so you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. Your ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.