HP Inc.

Period: 11/06/2015 to 06/21/2016
Lead Plaintiff Deadline: 01/04/2021

SUMMARY OF CASE:

A securities class action has been filed against HP Inc. (HPQ) on behalf of an institutional investor seeking to represent purchasers of HP common stock between November 6, 2015 through June 21, 2016.  This case has been filed in the USDC – N.D.CA.

HP provides personal computers, printers, and related supplies, solutions, and services. HP began operations after spinning off from Hewlett Packard Enterprise Company (“HPE”) on or about November 1, 2015. Following the spinoff, HP operated the Printing and Personal Systems businesses, while HPE retained the enterprise technology infrastructure, software, services, and financing businesses. Within HP’s Printing segment is the Supplies division, which consists of printing and computing supplies, such as toner, ink cartridges, and related printing supplies. Nearly 80% of HP’s operating profit was derived from its Printing business during the Class Period.

The complaint alleges that during the Class Period, defendants misrepresented HP’s business and financial condition by issuing false and misleading statements regarding HP’s financial performance and, in particular, its revenue, profit margin, and earnings. Specifically, defendants provided positive financial results for HP, but misrepresented and omitted to state that HP’s Supplies channel inventory management and sales practices had resulted in increased channel inventory and decreased revenues and profits. As a result of defendants’ false statements and omissions, the price of HP stock was artificially inflated to a high of more than $14 per share during the Class Period.

Then on June 21, 2016, HP announced an overhaul to its Printing sales model and revealed that it would reduce its Supplies channel inventory by $450 million, resulting in a corresponding reduction of $450 million in Supplies revenue over the remainder of 2016. Following this announcement, the price of HP stock declined 5.4% to close at $12.61 per share on June 22, 2016.