TWERSKY LAW GROUP Notifies Funko Inc. (FNKO) Investors of Class Action
Twersky Law Group, a highly regarded and reputable law firm based in New York, wishes to inform investors about a significant development in the form of a class action lawsuit against Funko Inc. (“Funko” or “the Company) (NASDAQ: FNKO) and certain officers of the company. This lawsuit has been filed on behalf of all individuals and entities that purchased or otherwise acquired Funko securities from May 6, 2022, through March 1, 2023 (the “Class Period”). Investors who acquired Funko securities during this defined timeframe are strongly encouraged to participate in this case by contacting atara@twerskylawgroup.com. The deadline to file a motion for appointment of lead plaintiff is August 1, 2023.
The fundamental objective of this class action lawsuit is to recover for the benefit of investors who purchased Funko securities during the Class Period, the losses they sustained as a consequence of the misleading statements made by Defendants in violation of the federal securities laws.
ALLEGATIONS
The Funko class action lawsuit alleges that defendants made false and/or misleading statements and failed to disclose crucial information during the Class Period. Specifically, the allegations include: (i) Funko had been experiencing significant delays in implementing its ERP software, which were not properly disclosed to investors; (ii) the move to a new warehouse without a functional ERP system would result in higher costs and inferior inventory management; and (iii) Funko’s inability to efficiently operate the new distribution center would have a substantial, undisclosed impact on its earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margin.
On August 4, 2022, Funko held an earnings call where it admitted to delaying the remaining steps of the ERP implementation until 2023 due to concerns about the platform’s readiness. As a result, Funko’s stock price declined by more than 18%. On November 3, 2022, Funko reported earnings per share that fell significantly short of analyst estimates and drastically lowered its fiscal year 2022 guidance, which caused Funko’s stock price to plummet by over 59%.
Finally, on March 1, 2023, Funko announced its financial results for the fiscal year of 2022, revealing a net loss of $5.2 million, a decrease in adjusted EBITDA margin to 7.4%, and adjusted earnings per diluted share well below previous estimates at just $0.57 per share. Consequently, Funko’s stock price fell by more than 29%, resulting in further losses for investors.
HISTORY OF FUNKO INC.
Funko Inc. is a pop culture consumer products company that is known for its collectible vinyl figures, action toys, plush accessories, apparel, and homewares. The company was founded in 1998 by Mike Becker in Snohomish, Washington. Initially, Funko focused on creating nostalgia-themed bobblehead figures, catering to a niche market of collectors and enthusiasts. Over the years, Funko entered into licensing agreements with various entertainment and pop culture entities, including major studios, production companies, and sports leagues. This allowed them to produce highly sought-after collectibles featuring popular characters from franchises such as Marvel, DC Comics, Star Wars, Disney, Harry Potter, and many others. In 2010, Funko introduced its Pop! Vinyl line, which quickly became one of its most successful and iconic product lines.
Funko went through significant changes in its ownership structure over the years. In 2005, the company was acquired by Fundamental Capital, LLC. Later, Fundamental Capital sold Funko to investment firm ACON Investments and media company Warner Music Group. A few years later, in 2017, Funko went public and began trading on the NASDAQ stock exchange under the ticker symbol “FNKO.”
Although primarily known for its collectible figures, Funko has also diversified its product portfolio to include other merchandise categories, such as apparel, accessories, and home decor. The company’s products are sold through various channels, including specialty retailers, mass-market retailers, e-commerce platforms, and its official online store.
JOIN THIS CASE
It is crucial to note that a class action lawsuit has already been filed in connection with these allegations. Therefore, for those individuals who suffered financial losses in their investments in Funko during the Class Period, there is a limited opportunity to seek appointment as a lead plaintiff. This process entails requesting the Court to designate them as the primary representative on behalf of the entire class. The deadline for submitting such a request is August 1, 2023. It is important to emphasize that while becoming a lead plaintiff can offer certain advantages, participation in the recovery process and the potential for financial compensation does not mandate serving as a lead plaintiff.
Twersky Law Group, a distinguished legal firm renowned for its attorneys expertise in handling securities fraud class actions and shareholder derivative suits, who have a long-standing track record of successfully recovering significant sums of money for investors nationwide. With an unwavering commitment to seeking justice for their clients, the firm’s attorneys are resolute in pursuing fair compensation on behalf of those affected by alleged securities law violations. As with any legal matter, it is essential to understand that this announcement constitutes attorney advertising. Past case outcomes and results achieved do not guarantee similar outcomes in this particular case.
Investors who believe they may qualify as potential class members in the class action lawsuit against Funko Inc. are strongly encouraged to reach out directly to the firm for further information and assistance. The knowledgeable legal professionals at Twersky Law Group stand ready to provide guidance and support to investors seeking to protect their rights and pursue the recovery they deserve.
ABOUT US
For more information as well as to join this case please contact Atara Twersky, Esq. at atara@twerskylawgroup.com. Atara is Principal at Twersky Law Group and of counsel at AF&T Law Firm where she is director of Investor Services. Atara focuses her practice on assisting her clients with increasing their investment portfolio recoveries and ensuring that their portfolios remain healthy and robust. For more information on shareholder recoveries, listen to Atara ’s Pension and Investments Podcast with notable guests in the pension fund Industry that discusses various matters relating to investment portfolios. For more information on Atara and her legal work pertaining to shareholder protection click here.