Boca Raton, FL, May 28, 2010—In a class action filed on Monday, May 24, 2010, Boca Raton-based Vitacost.com, Inc. (“Vitacost” or the “Company”) (NASDAQ: VITC) and several of its executives and directors, including its CEO and CFO, were sued for violations of the federal securities laws, including securities fraud. Vitacost operates as an online retailer and direct marketer of vitamins and other health products. According to the lawsuit, the Company’s executives, among other violations, artificially inflated Vitacost stock by releasing false and misleading information regarding the Company’s financial results and business prospects. As a result of these violations, Vitacost shareholders lost millions of dollars in damages.
Saxena White P.A. commenced the class action in the United States District Court for the Southern District of Florida on behalf of all persons or entities who purchased shares of Vitacost common stock pursuant and/or traceable to the Company’s Initial Public Offering commencing on or about September 24, 2009 (the “IPO”) and on behalf of purchasers of the Company’s common stock between September 24, 2009 and April 20, 2010, inclusive (the “Class Period”).
The complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning Vitacost’s financial performance were materially false and misleading and failed to disclose : (1) that the Company was starting a product-mix shift away from the high-margin proprietary products; (2) that Vitacost inflated demand for its proprietary products; (3) that the Company was pushing out excess product to customers so that it could mask declining demand; (4) that Vitacost was experiencing logistical issues at its own plants; (5) that the Company lacked significant oversight processes and procedures and utilized ineffective operations software, despite knowing that those issues existed; (6) that, as a result of this, Vitacost’s financial results were materially inflated at all relevant times; (7) that the Company lacked adequate internal and financial controls; and (8) that Vitacost’s projections regarding future growth lacked in any reasonable basis when made.
On April 20, 2010, after the close of the market, Vitacost issued a press release in which it announced updated guidance for revenue and earnings per share for the first quarter ending on March 31, 2010 and full year 2010. Contrary to the defendants’ prior statements in which they emphasized the Company’s strong business prospects and growth strategies, Vitacost cut its first-quarter and full-year profit and revenue estimates, citing disappointing sales along with manufacturing problems. On this news, shares of Vitacost stock plunged $3.02 per share, or 24 percent, to close on April 21, 2010 at $9.54 per share on unusually heavy volume.
A copy of the complaint may be viewed at the firm’s website at www.saxenawhite.com. If you purchased Vitacost stock between September 24, 2009 and April 20, 2010, you may contact Joe White or Greg Stone at Saxena White P.A. to discuss your rights and interests:
Joseph E. White, III
jwhite@saxenawhite.com
Greg Stone
gstone@saxenawhite.com
Saxena White P.A.
2424 North Federal Highway, Suite 257
Boca Raton, FL 33431
Tel: (561) 394-3399
Fax: (561) 394-3382
www.saxenawhite.com
If you purchased Vitacost shares in the Class Period, including purchases made pursuant to the September 24, 2009 Initial Public Offering, and wish to apply to be the lead plaintiff in this action, a motion on your behalf must be filed with the Court no later than July 23, 2010. You may contact Saxena White P.A. to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. Please note that you may also retain counsel of your choice and need not take any action at this time to be a class member.
Saxena White P.A., which has offices in Boca Raton and Boston, specializes in prosecuting securities fraud and complex class actions on behalf of institutions and individuals. Currently serving as lead counsel in numerous securities fraud class actions nationwide, the firm has recovered hundreds of millions of dollars on behalf of injured investors and is active in major litigation pending in federal and state courts throughout the United States.
