A bad start of 2017 for apparel giant Under Armour is getting even worse.
Amid plummeting stock prices, Under Armour has been sued in federal court in Maryland by a Georgia investor who says the company has misled shareholders about its financial wellbeing. The class action suit alleges that while outwardly stating that the company was thriving, CEO Kevin Plank sold a large chunk of his individual stock to minimize his personal losses from the companies failures.
From the lawsuit:
Kevin A. Plank (“Plank”), as Chief Executive Officer of Under Armour, saw the writing on the wall, and, starting in April 2016 – more than nine months before the Company came clean about the actual revenue and earnings – began shifting the Company’s capital structure by selling more of his stake to prevent any individual loss, yet maintain control of the Company.
The news was first reported by Courthouse News. Under Armour sent The Comeback the following statement:
“We are aware of the plaintiff’s claims and find them without merit. Under Armour will vigorously defend the case.”
Under Armour’s stock has been in a free-fall in 2017, after seeing a 30 percent drop in 2016, due to lower-than-expected sales in the fourth quarter of last year. The sales drop-off is due in part to struggling sales of the latest Steph Curry shoes. Curry is Under Armour’s most visible endorser. The company also appears to be in turmoil after the abrupt resignation of its CFO.
Plank is also in hot water personally after saying that Donald Trump is “a real asset for the country.”
