07/19/24 | $29.5M Settlement Submitted for Preliminarily Approval
Hagens Berman is pleased to announce a settlement with Defendants totaling $29.5M. The settlement provides significant relief to purchasers of the securities of Plantronics, Inc. from August 7, 2018 through November 5, 2019, both dates inclusive. The preliminary approval hearing will be held on September 26, 2024. We are awating the court's order approving the motion for preliminary approval of settlement. More details will be posted as they become available.
This is a securities class action on behalf of investors who purchased securities of Plantronics, Inc. (“Plantronics” or the “Company”) from Aug. 7, 2018 through Nov. 5, 2019 (the “Class Period”), seeking to recover damages caused by Plantronics’ and certain of its senior officers’ violations of the Securities Exchange Act of 1934.
Headquartered in Santa Cruz, California, Plantronics designs and manufactures lightweight communications headsets, telephone headset systems, and other communications endpoints. The case arises from Defendants’ false and misleading statements concerning the integration and synergistic benefits of Polycom, a video conference equipment provider which the Company acquired on July 2, 2018. Specifically, the Company touted a strong new product roadmap of Plantronics-Polycom products, and said integration of Polycom was “on track” and yielding tens of millions of dollars in synergies. In truth, Plantronics engaged in channel stuffing to artificially boost sales, lacked effective internal control over inventory levels, and failed to monitor inventory levels ahead of multiple product launches such that new models were displacing demand for the Company’s older products.
The truth began to emerge on Nov. 5, 2019, when the Company disclosed a $65 million reduction in channel inventory “by reducing sales to channel partners” and slashed its fiscal 2020 guidance. Defendants blamed the inventory reduction on an “aging product line” that would need to be cleared to “prepare for upcoming product transitions.” Plantronics also reported the sudden departure of its Executive Vice President of Global Sales. As a result of these disclosures, the Company’s stock price declined nearly 40%, thereby damaging investors.
