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Class action lawsuit filed against Malibu Boats

A class action lawsuit has been filed against Malibu Boats.

The lawsuit has been filed on behalf of investors who purchased Malibu Boats securities between November 4 2022, and April 11 2024, inclusive.

The lawsuit alleges that Malibu Boats over manufactured and pumped nearly $100 million of its highest priced, highest margin, slow moving boat inventory into 15 Tommy’s Boats dealerships.

On February 20 2024, Malibu Boats announced the company’s CEO had ‘mutually agreed’ to cease to serve as CEO.

In April 2024, Malibu Boats revealed that Tommy’s had filed a complaint against the company.

According to the Complaint, Malibu Boats forced the company’s highest priced, highest margin, slow moving Malibu branded inventory (as opposed to the lower margin, but faster moving Axis brand) onto Tommy’s dealerships.

Malibu Boats recognises a sale when the dealer takes delivery of the boat, regardless of whether it has been sold to the end user.

It is alleged that the scheme allowed Malibu Boats to represent that it was experiencing strong wholesale demand and sales, even as sales to end users declined.

The complaint further alleged the company withheld payment of incentives from Tommy’s for nearly two years before suddenly cutting ties with Tommy’s.

In addition, the class action states that Malibu Boats faced substantial risk of litigation from one of its top dealers, that the company’s CEO departed due to this role in this scheme and that statements about Malibu Boats business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

The legal action states that the company artificially inflated Malibu’s sales performance, market share, and stock value.

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