A class action suit contends former executives misled investors in 2017 by failing to report problems the company faced.
Unhappy shareholders have filed a class-action lawsuit against Diebold Nixdorf, accusing former company executives of misleading investors back in 2017.
The action, filed in U.S. District Court Southern District of New York, is open to shareholders who bought stock in 2017 between May 4 and July 5. The complaint names the company and two former executives, Andy W. Mattes, who was president and chief executive officer, and Christopher A. Chapman, who served as senior vice president and chief financial officer.
According to the filing, the defendants made "materially false and misleading statements" concerning Diebold Nixdorf's business, operations and compliance policies. The action was filed Tuesday, two weeks after several law firms announced they were investigating Diebold Nixdorf on behalf of investors.
In a statement issued Wednesday, Diebold Nixdorf said it intends to vigorously defend itself. The company believes the claims are without merit and denies liability, according to the statement.
The class period coincides with Diebold Nixdorf's filing its first quarter 2017 earnings on May 4 and the July 5 announcement that the company was restating its projected deficit for 2017. Following the July 5 restatement of earnings, Diebold Nixdorf's stock value dropped to $21.60 per share, losing $6.40 in one day of trading.
In the May earnings announcement, Diebold Nixdorf executives projected the company would lose $50 million to $75 million for 2017. But in the July statement the company projected the loss would range between $110 million and $125 million. Diebold Nixdorf attributed the increased loss to a delay in systems rollouts and a longer customer decision making process.
Diebold Nixdorf ended 2017 with a loss of $233.1 million. Before the year ended, Mattes had been dismissed as president and CEO, his departure coming less than 18 months after working the deal that saw Diebold merge with Wincor Nixdorf. On Oct. 1, 2018, the company announced that Chapman was leaving.
Gerrard Schmid became president and CEO in February 2018 and launched a program called DN Now aimed at cutting costs and streamlining operations. Jeffrey Rutherford became chief financial officer in January.
Since the summer of 2017, Diebold Nixdorf's stock value has plummeted. Shares traded for less than $3 each during a three week stretch in December, and didn't begin to rebound until mid-February. On April 30, the company reported a first quarter loss of $132 million.
The company's stock closed Wednesday at $9.33, gaining 2 cents per share during a short trading day.
Law firms specializing in class-action lawsuits on behalf of investors began issuing statements about Diebold Nixdorf in mid-June. More than a half dozen announced they were investigating the company. Several now have encouraged investors to join the class-action lawsuit.
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