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Posted July 17, 2017

Investors file lawsuits against HD Supply

Several law firms have filed class action lawsuits againt HD Supply, alleging the company provided misleading information to investors surrounding its sales of HD Supply Waterworks.


Bragar Eagel & Squire, P.C. filed a class action lawsuit in the U.S. District Court for the District of Northern Georgia on behalf of all persons or entities who purchased or otherwise acquired HD Supply Holdings Inc. securities between Nov. 9, 2016 and June 5, 2017. 

On June 6, 2017, HD Supply reported first quarter 2017 earnings that missed analyst estimates; disclosed the divestiture of one of its main business segments, “Waterworks,” which is the nation’s largest distributor of water, sewer, storm and fire protection products; and announced increased capital investments in its FM segment. Following these disclosures, HDS’s stock price fell $8.46 over two trading days, or over 20%, to close at $32.81 per share on June 7, 2017.

The complaint alleges that throughout the class period, HD Supply made false and/or misleading statements and/or failed to disclose that: (1) HD Supply’s full year 2017 growth and operational leverage targets were unattainable; (2) the operational recovery of its Facilities Maintenance supply chain was not going according to plan; (3) the Company was exploring the sale of its Waterworks segment; (4) Defendant DeAngelo, with full knowledge of the undisclosed materially adverse facts alleged herein, embarked on a selling spree of personal holdings of HD Supply stock that netted him over $54 million in proceeds; and (5) as a result of the foregoing, Defendants’ statements about HD Supply’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis.

In a separate filing, Goldberg Law PC alleges that HD Supply violated federal securities laws by making materially false and misleading public statements, and/or failing to disclose material information, specifically: that the company’s 2017 full year growth and operational leverage targets were unattainable; that the recovery of its Facilities Maintenance supply chain was not going as planned; that HD Supply was attempting to sell its Waterworks segment; and that the company’s CEO Joseph J. DeAngelo, embarked on a selling spree of personal shares of HD Supply stock that netted him over $54 million.

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