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Boston Beer Stock Class Action Lawsuit Overview:
- Who: Boston Beer has been hit with a class action lawsuit alleging violations of the Securities Exchange Act (SEC).
- What: Investors say that the company misled them in regards to its prospects in the hard seltzer market.
- Where: The class action lawsuit was lodged in New York federal court.
Boston Beer misled investors with false statements — notably around the hard-seltzer market, failing to tell them sales were slowing and driving up stock prices, a new class action lawsuit alleges.
The class action lawsuit was filed in New York by lead plaintiff Joseph Siegel who alleges that the company, which owns the Truly Hard Seltzer brand, violated the Securities Exchange Act (SEC). Boston Beer stock prices driven higher by materially false and misleading statements, as well as failing to disclose material adverse facts about its business, operations, and prospects, claims the plaintiff.
Soft Market for Hard Seltzer Tanks Boston Beer Stock
Siegel alleges Boston Beer failed to disclose to investors that its hard seltzer sales were decelerating; that, as a result, Boston Beer was reasonably likely to incur inventory write-offs; that the Company was reasonably likely to incur shortfall fees payable to third party brewers; and that, because of those factors, its stock price would be adversely impacted.
“As a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and lacked a reasonable basis,” the Boston Beer stock lawsuit reads.
On July 22, 2021, Boston Beer reduced its full year 2021 guidance, expecting earnings per share between $18 and $22, down from a prior range of $22 and $26, the claim explains. The company cited softer-than-expected sales in the hard seltzer category and overall beer industry and also stated that it had “overestimated the growth of the hard seltzer category in the second quarter.”
On this news, Boston Beer stock prices fell $246.54, or 26 percent, to close at $701 per share on July 23, 2021, on unusually heavy trading volume.
Then on September 8, 2021, Boston Beer withdrew its 2021 financial guidance, citing decelerating sales of hard seltzer products. The company also stated that it “expects to incur hard seltzer-related inventory write-offs, shortfall fees payable to 3rd party brewers, and other costs” for the remainder of fiscal 2021, the claim reads.
The next day, Boston Beer stock prices fell $21.09, or 3.7 percent, to close at $538.31 per share on September 9, 2021.
“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” Siegel alleges.
He wants to represent Boston Beer investors nationwide and is suing for violations of the Securities Exchange Act. He seeks certification of the Class, damages, legal fees and costs, and a jury trial.
Did you buy Boston Beer stock? Do you think the company overstated the hard seltzer market? Tell us in the comments section below!
The plaintiffs are represented by Gregory B. Linkh, Robert V. Prongay, Charles H. Linehan, and Pavithra Rajesh of Glancy Prongay & Murray LLP and Frank R. Cruz of The Law Offices of Frank R. Cruz.
The Boston Beer Stock Price Class Action Lawsuit is Siegel v. The Boston Beer Company, Inc. et al., Case No. 1:21-cv-07693 in the U.S. District Court Southern District of New York.
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