CASES
Bare Escentuals, Inc.
Class Period: Sep 28, 2006 to Oct 31, 2008
Lead Plaintiff Deadline: Sep 15, 2009 + Deadline passed
Summary of Case:
On August 25, 2009, Scott+Scott LLP filed a class action complaint against Bare Escentuals, Inc. ("Bare Escentuals" or the "Company'') (Nasdaq: BARE), a marketer and seller of skin care and body care products, and certain current and former directors and executives and its investment bankers in the U.S. District Court for the Northern District of California. The action for violations of the Securities Act of 1933 and for violations of the Securities Exchange Act of 1934 is brought on behalf of those purchasing Bare Escentuals common stock during the period beginning September 28, 2006 through October 31, 2008, inclusive (the "Class Period''), including purchases of common stock issued pursuant and/or traceable to the false and misleading Registration Statements and Prospectus filed in connection with the Company's September 28, 2006 initial public offering and March 14, 2007 follow-on-offering.
The complaint alleges that, during the Class Period, Bare Escentuals, as well as certain of the Company's officers and directors and its investment bankers, made materially false and misleading statements regarding the Company's sales and financial performance. As a result, the plaintiff and other members of the Class have suffered hundreds of millions of dollars in damages as a result of their purchase of Bare Escentuals' common stock during the Class Period, as well as in the initial public offering and March 2007 offering, at artificially inflated prices.
Specifically, the scheme: (i) misstated Bare Escentuals' business, operations and the intrinsic value of Bare Escentuals common stock; (ii) allowed Company insiders to collectively sell tens of millions of shares of their personally-held Bare Escentuals common stock at artificially inflated prices, receiving hundreds of millions in proceeds; and (iii) caused Plaintiff and members of the Class to purchase Bare Escentuals common stock at artificially inflated prices.
The false and misleading statements issued by the Company had the intended effect and caused Bare Escentuals common stock to trade at artificially inflated levels throughout the Class Period, reaching as high as $42.99 per share on May 30, 2007. By failing to disclose to investors that the Company was experiencing weakness in its infomercial business and related sales and operational defects and difficulties, the picture of Bare Escentuals' business and prospects presented to the investing public was false and misleading.
As a direct result of a series of partial disclosures beginning on June 5, 2007, and extending through October 31, 2008, the price of Bare Escentuals common stock declined sharply. As the truth about Bare Escentuals and its financial operations reached the market, including management's October 31, 2008 announcement that it would be forced to slash prices and cut the Company's financial guidance going forward, the price of the Company's common stock plummeted to as low as $4.20 per share in intraday trading, almost 80% below the IPO price and more than 87% below the March 2007 Offering price.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.