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Investigation launched into Malibu Boats

An investigation into Malibu Boats on behalf of investors has been initiated by an American law firm.

The investigation concerns the boatbuilder’s possible violations of federal securities laws and follows a statement released by Malibu saying it was facing a complaint regarding dealership agreements with Tommy’s Boats.

The complaint alleged that Malibu Boats took part in a scheme to over manufacture and pump nearly $100 million of its highest priced, highest margin, slow moving boat inventory into 15 Tommy’s Boats dealerships in order to artificially inflate Malibu’s sales performance.

In a statement, The Law Offices of Frank R. Cruz, said: “On this news, Malibu’s stock price fell $3.34, or 8%, to close at $38.48 per share on April 12, 2024, thereby injuring investors.”

Malibu Boats says it is going to vigorously defend the claims from Tommy’s Boats.

Net sales

In a statement the boatbuilder said the sales to locations under common control of Tommy’s Boats represented around 9.4%, 10.7% and 4.0% of the Company’s consolidated net sales for fiscal year 2022, fiscal year 2023 and the first six months of fiscal year 2024, respectively.

These included around 23.3% and 10.1% of consolidated sales in fiscal year 2023 and the first six months of fiscal year 2024, respectively, for the Company’s Malibu segment.

The Company does not currently have dealership agreements in effect with Tommy’s Boats.

“The Company is actively engaged with its dealer network to mitigate any marketplace disruption and to provide a strong dealer partner in each of the Company’s markets served by Tommy’s Boats. Boats LLC has a repurchase agreement with M&T Bank, the floor financing lender to Tommy’s Boats, with respect to approximately $5.2 million of Malibu/Axis boats based on recent reporting by M&T Bank,” said the statement from Malibu Boats.

Malibu Boats added: “The complaint alleges that Malibu Boats breached its obligations under dealership agreements with Tommy’s Boats.”

Tommy’s Boats is seeking monetary damages.

Investors who have incurred losses may be eligible to take part in the investigation.

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