Lawsuit: Stockholder Blames Funko’s Failed IPO on Funky Accounting Practices
by Erin Shaak
Lowinger v. Funko, Inc. et al.
Filed: February 7, 2018 ◆§ 2:18cv201
A proposed class action has been filed against Funko, Inc., its board of directors, and a group of eight underwriters over claims that the defendants published misleading statements in connection with Funko’s initial public offering.
A proposed class action has been filed against Funko, Inc., its board of directors, and a group of eight underwriters over claims that the defendants published misleading statements in connection with Funko’s initial public offering (IPO). According to the suit, the company’s registration statement and prospectus contained “materially misleading impressions” representing to investors that Funko’s “earnings growth trends were stronger than they actually were” and that the toy maker held a promising future.
The complaint claims, however, that Funko’s IPO “flopped” and caused the price of its shares to drop 41 percent. The suit argues that potential investors “may have been spooked” by a Bloomberg Gadfly article criticizing the “fun-house accounting” principles displayed in the defendants’ registration statement and prospectus that allegedly misled the plaintiff and potential class members into investing in the company.
The suit, filed in state court in November 2017, has recently been removed to the District Court for the Western District of Washington.
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