Tile Shop Hldgs, Inc. (NASDAQ:TTS) Investor Investigation Concerning Potential Securities Laws Violations Announced

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Company Name(s): 
Tile Shop Holdings
Affected Securities: 

October 30, 2014 (Shareholders Foundation) - An investigation on behalf of investors of Tile Shop Hldgs, Inc. (NASDAQ:TTS) shares over potential securities laws violations by Tile Shop Hldgs and certain of its directors and officers in connection certain financial statements was announced.

The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of Tile Shop Hldgs, Inc. (NASDAQ:TTS) concerning whether a series of statements by Tile Shop Holdings regarding its business, its prospects and its operations were materially false and misleading at the time they were made.

Shares of Tile Shop Hldgs, Inc. (NASDAQ:TTS) grew from under $17 per share in early 2013 to as high as over $30 in July, respectively almnost $30 per share in September 2013. Since then NASDAQ:TSS shares declined to under $24 in late October 2013.

On November 14, 2013, a report was published that alleged that Tile Shop Hldgs, Inc. has greatly exaggerated its true financial performance, that Tile Shop Hldgs, Inc. failed to disclose Beijing Pingxiu as a material related party supplier, that Tile Shop Hldgs, Inc. uses Beijing Pingxiu to overstate inventories, understate cost of sales and overstate gross profits, that Tile Shop Hldgs, Inc. purchases goods from Beijing Pingxiu at or near cost to allow Tile Shop Hldgs, Inc. to achieve an artificial cost advantage, and that Tile Shop Hldgs, Inc. overstates earnings.

On November 15, 2013, a lawsuit was filed that alleges that Shop Hldgs, Inc. violated the Securities Exchange Act of 1934. More specifically, the plaintiff alleges Tile Shop Hldgs failed to disclose that one of its largest suppliers, Beijing Pingxiu (“BP”), is an undisclosed related company secretly controlled by Fumitake Nishi, the brother-in-law of the Company’s CEO and a Tile Shop Hldgs employee.

On October 28, 2014, Tile Shop Hldgs, Inc. reported its third quarter 2014 results. Among other things, Tile Shop Hldgs, Inc. disclosed that founder and Chief Executive Officer Robert Rucker will retire as CEO effective January 1, 2015 and be replaced by current Chief Operating Officer Chris Homeister.

Shares of Tile Shop Hldgs, Inc. (NASDAQ:TTS) declined to as low as $6.94 per share on October 28, 2014.

On October 30, 2014, NASDAQ:TTS shares closed at $8.41 per share.