Insulin pump manufacturer, Tandem Diabetes Care, Inc., is facing a lawsuit on behalf of investors for allegedly misleading investors about the company's financial performance. The lawsuit accuses Tandem of overestimating their projected profits and then blaming the alleged revenue underperformance on inflation and Covid.
According to the complaint, Tandem reported 25% year-over-year revenue growth and a 15% increase in insulin pump shipments in February 2022. The company also provided guidance for its expected sales in 2022, which ranged from $845 million to $860 million, representing an annual sales growth of 20% to 23%. However, in the second quarter of 2022, Tandem disclosed that it would not meet its previously given guidance, citing inflation, pandemic-related factors and competition, according to the complaint.
The lawsuit claims that Tandem's CEO John F. Sheridan and CFO Leigh A. Vosseller allegedly downplayed these challenges and assured investors that they were temporary. However, in November 2022, the company reduced its sales projection for 2022 to $800-$805 million. Following this announcement, Tandem's stock dropped over 30%, according to the complaint.
The case was filed in the U.S. District Court for the Southern District of California on March 29 on behalf of named plaintiff Stephen Bushansky, individually and derivatively on behalf of Tandem and its investors. According to the complaint, Bushansky has held Tandem stock since 2013.
Plaintiffs are represented by attorney Joel E. Elkins, of Weiss Law, of Los Angeles.
Bushansky has partnered with Weiss Law attorneys on other shareholder actions against other companies, as well.