MGP Ingredients, Inc. Investors: February 14, 2025 Filing Deadline in Securities Class Action – Contact Lieff Cabraser

Rhea-AI Summary

MGP Ingredients (MGPI) faces a securities class action lawsuit for allegedly making false statements about its business and product demand between May 4, 2023, and October 30, 2024. The lawsuit claims MGPI executives misled investors about inventory issues and product demand strength.

The company's stock experienced significant drops following three key revelations: On February 22, 2024, MGPI's stock fell nearly 15% after announcing below-consensus 2024 revenue guidance and acknowledging industry-wide inventory destocking issues. On October 17, 2024, the stock declined approximately 30% after disclosing soft demand and high inventory problems. Finally, on October 31, 2024, shares dropped another 15% following announcements of whiskey production scaling down and inventory challenges.

Positive

• None.

Negative

• Below-consensus revenue guidance for 2024
• Significant inventory destocking issues affecting sales
• Soft product demand leading to reduced whiskey production
• Stock price declined 15% on February 22, 2024 ($13.65 drop)
• Stock price fell 30% over three days in October 2024 ($24.07 drop)
• Additional 15% stock price decline on October 31, 2024 ($8.27 drop)

Insights

Legal Expert

<p>The securities class action against MGPI represents a <b>serious legal challenge</b> stemming from alleged misrepresentations about inventory levels and product demand. The complaint's timeline reveals a pattern of potentially misleading statements followed by three distinct stock price drops: <money>$13.65</money> (15%), <money>$24.07</money> (30%) and <money>$8.27</money> (15%). The cumulative stock decline of approximately <percent>60%</percent> from peak to trough significantly strengthens the plaintiffs' loss causation argument. The case's merit is bolstered by specific contradictions between management's public statements and subsequent revelations about inventory issues.</p><p>For retail investors, this lawsuit highlights the heightened scrutiny of post-pandemic business performance claims, particularly in the spirits industry where COVID-driven demand created unusual market conditions. The February 2025 lead plaintiff deadline gives affected investors ample time to evaluate their losses and consider participation in the class action.</p>

Financial Analyst

<p>The sequential revelations about MGPI's inventory challenges point to deeper structural issues in the spirits market post-pandemic. The initial <b>wholesale destocking warning</b> in February 2024, followed by confirmation of demand softness in October, suggests a fundamental miscalculation of market dynamics. The need to scale down whiskey production indicates a significant supply-demand imbalance that will likely impact margins and working capital efficiency well into 2025.</p><p>In simpler terms: During COVID, people bought more hard liquor. MGPI ramped up production expecting this trend to continue. Instead, demand normalized, leaving them with too much inventory. Now they're stuck with excess stock they can't sell quickly, forcing production cuts and hurting their financial performance. This inventory correction cycle typically takes several quarters to resolve, suggesting continued pressure on the stock price.</p>

SAN FRANCISCO--(BUSINESS WIRE)-- National plaintiffs law firm Lieff Cabraser Heimann & Bernstein, LLP encourages investors in MGP Ingredients, Inc. (“MGPI” or the “Company”) (NASDAQ: MGPI) who purchased or otherwise acquired MGPI common stock between May 4, 2023, and October 30, 2024, inclusive (the “Class Period”) to contact us immediately regarding a pending securities class action against MGPI. The deadline to apply to be lead plaintiff is February 14, 2025.

Class Period: May 4, 2023 – October 30, 2024

Lead Plaintiff Motion Deadline: February 14, 2025

Case information: https://lieffcabraser.com/securities/mgpi/

Contact us: Email or text investorinfo@lchb.com or call 1-800-541-7358

MGPI, incorporated and headquartered in Atchison, Kansas, manufactures, distills, and sells alcoholic beverages such as tequila, bourbon, rye, and other whiskeys, as well as grain-neutral spirits such as vodka and gin. Demand for liquor, hard liquor in particular, rose in 2020 due to the COVID-19 pandemic.

The action alleges that, throughout the Class Period, MGPI and certain of its senior executives made materially false and misleading statements regarding the Company’s business and demand for its liquor products. Specifically, Defendants falsely and repeatedly assured investors that the Company was not facing excess inventory issues and demand for its products remained strong.

On February 22, 2024, the truth began to emerge. The Company issued full-year 2024 revenue guidance that was below industry consensus and noted that “inventory destocking at a wholesale level will remain an issue for the branded spirits industry in 2024.” The Company’s new CEO and President assured that the Company had worked hard to manage wholesale inventory levels and that demand for its products remained healthy. Following this news, MGPI’s common stock price fell by $13.65 per share, or nearly 15%, to close at $78.14 per share on February 22, 2024.

On October 17, 2024, MGPI revealed that soft demand and high inventories were in fact undermining its sales. On this news, MGPI’s stock price declined by $24.07, or nearly 30%, over the next three trading days to close at $57.50 on October 22, 2024.

Finally, on October 31, 2024, the Company stated that it would have to “scale down our whiskey production” and that “further inventory tightening is a headwind in the near term.” On this news, MGPI’s stock price declined by another $8.27, or nearly 15%, to a closing price of $48.04 on October 31, 2024.

About Lieff Cabraser

Lieff Cabraser Heimann & Bernstein, LLP, with over 125 attorneys in offices in San Francisco, New York, Nashville, and Munich, Germany, is an internationally-recognized law firm committed to advancing the rights of investors and promoting corporate responsibility. Repeatedly recognized as a “Plaintiffs’ Powerhouse” by Law360, Lieff Cabraser has litigated some of the most important civil cases in the United States, and has assisted clients in recovering over $129 billion in verdicts and settlements. For over 50 years, Lieff Cabraser has remained committed to ensuring access to justice for all.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241223318163/en/

Source/Contact

Sharon Lee

Lieff Cabraser Heimann & Bernstein, LLP

415 956-1000

slee@lchb.com

Source: Lieff Cabraser Heimann & Bernstein, LLP

FAQ

What caused MGPI stock to drop 30% in October 2024?

MGPI stock dropped 30% after the company revealed soft demand and high inventory issues on October 17, 2024, causing the stock to decline by $24.07 over three trading days.

What is the deadline for the MGPI securities class action lawsuit?

The deadline to apply as lead plaintiff in the MGPI securities class action lawsuit is February 14, 2025.

What period does the MGPI class action lawsuit cover?

The class action lawsuit covers investors who purchased MGPI common stock between May 4, 2023, and October 30, 2024.

How much did MGPI stock fall after the February 22, 2024 announcement?

MGPI stock fell $13.65 per share (nearly 15%) to close at $78.14 after announcing below-consensus guidance and inventory destocking issues.

What operational changes did MGPI announce on October 31, 2024?

On October 31, 2024, MGPI announced it would scale down whiskey production due to inventory tightening headwinds.