The Class: Robbins LLP informs investors that a shareholder filed a class action on behalf of all purchasers of Compass Minerals International, Inc. (NYSE: CMP) common stock between October 31, 2017 and November 18, 2018, for violations of the Securities Exchange Act of 1934.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Compass Minerals. Shareholders who want to be appointed lead plaintiff for the class must file their papers by December 20, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: Compass Minerals International, Inc. (CMP) Misrepresented the Cost of Mining and the Company's Salt Production Levels
According to the complaint, Compass Minerals mines and produces essential minerals, including salt for winter roadway safety and other consumer, industrial, and agricultural uses, and specialty plant nutrition minerals that improve the quality and yield of crops. During the class period, Compass Minerals operated the largest underground rock salt mine in the world in Goderich, Ontario, Canada, which the Company routinely hailed as the “crown jewel” of its asset portfolio. Prior to the start of the class period, defendants announced that the Company was investing in upgrades to the mining system at Goderich, from drilling-and-blasting to continuous mining and continuous haulage (“CMCH”), primarily in an effort to reduce costs and improve profitability. At that time, the Company forecasted the project would cost $70-$80 million and, after it was fully implemented, would reduce the unit cost at Goderich by over 23%, saving the Company approximately $30 million annually beginning in 2018.
Defendants repeatedly assured investors that the CMCH upgrade at the Goderich mine was on track to materially reduce costs and boost the Company’s operating results starting in 2018. However, defendants’ statements were misleading because they failed to tell investors that costs at the Goderich mine were increasing rather than decreasing. Defendants also misrepresented the amount of salt the Company was able to produce at Goderich using the new CMCH equipment, and failed to disclose how the known and ongoing production shortfalls it was experiencing were reasonably expected to reduce its future operating income.
On October 23, 2018, the Company pre-announced third quarter 2018 financial results that were significantly below expectations and lowered its outlook for the remainder of the year. Following this announcement, the price of Compass Minerals stock declined by more than 30% over the following two days. Then, before the market opened on November 19, 2018, the Company announced the abrupt termination of its CEO, Malecha. Following this announcement, the price of Compass Minerals stock declined by 8% over the following three days.
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