Join our daily newsletter At The Bell to receive exclusive market insights
- The glass is half empty for investors as another class action is filed against The A2 Milk Company (A2M) in the Supreme Court of Victoria
- In October, Slater and Gordon filed a class action against A2 Milk on behalf of investors who bought shares over a nine-month period during which saw a massive share price fall
- Now, Shine Lawyers have filed a second class action for similar reasons
- At the end of FY21, the company reported earnings 20 per cent lower than predicted, resulting in a 62 per cent drop in the share price
- On the market today, A2 Milk was down 0.32 per cent and is trading at $6.29 per share
The A2 Milk Company (A2M) has been hit with a second class action, this time with Shine Lawyers, as investors sour over share price fall.
Slater and Gordon
In early October, law firm Slater and Gordon filed a class action against A2 Milk on behalf of investors who bought shares over a nine-month period during which the infant formula maker posted four earnings downgrades.
The claim has been filed with the Supreme Court of Victoria on behalf of shareholders who suffered losses after purchasing A2 Milk shares on the ASX and NZX between August 19, 2020, and May 9, 2021.
The class action alleges that the company engaged in misleading or deceptive conduct in breach of the Corporations Act. A2 Milk is also been accused of breaching continuous disclosure rules in posting four downgrades over the nine months.
Shine Lawyers
Not long after, Shine Lawyers started to investigate and today the A2 Milk was served with the class action.
These proceedings are similar to the ones filed by Slater and Gordon.
Craig Allsopp, the class actions Practice Leader leading the claim, said “investors who purchased shares between 19 August 2020 and 7 May 2021 have a right to recover their losses”.
“Our claim alleges that A2 Milk had predicted its baby formula would have a high sales performance in FY21, contributing to a 30 per cent boost to its earnings before interest, taxes, depreciation, and amortisation, but the forecast was misleading and caused our clients significant financial loss,” he said.
At the end of FY21, the company reported earnings 20 per cent lower than predicted, resulting in a 62 per cent drop in the share price.
“We believe A2 Milk did not reasonably predict its profit margin, and should have known that its expected earnings were not going to be achieved in that fiscal year,” he added.
However A2 Milk has rejected all claims and will defend its self in the class actions.
“The company considers that it has at all times complied with its disclosure obligations, denies any liability and will vigorously defend the proceedings,” A2 Milk told the market.
On the market today, A2 Milk was down 0.32 per cent and is trading at $6.29 per share at 12:02 pm AEDT.
