GNC Holdings Inc. (NYSE:GNC) reported its third quarter results Tuesday, revenue increase of 2.4% to $672.2 million compared with last year third quarter, but net income decrease of 29% to $45.8 million compared with last year, and diluted earning per share increase of 1.3% to $0.76 compared with the third quarter of 2014.
Surprisingly, GNC drop 14% in premarket, and continue decrease of 27% to $27.42 in the mid of day. According to the press release, the reason is obviouse.
On Tuesday morning, Shareholder Rights Law Firm Johnson & Weaver, LLP announces its investigating on potential violations of the federal securities laws by GNC and certain of its officers.
Then in the midday, Levi & Korsinsky, LLP announces that it has commenced an investigation of GNC concerning possible violations of federal securities laws by GNC and/or certain of its officers and directors.
Two hours later, Goldberg Law PC announces that it igating claims of potential misrepresentations by GNC Holdings Inc. The investigation focuses on whether GNC and its officers violated securities laws by issuing misleading information to investors.
Three law firm announce investigation of GNC’s potential violations of the federal laws at almost same time, stock price jump down immediately.
These investigation concerns whether GNC violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On October 22, 2015, the State of Oregon initiated a lawsuit against GNC claiming that the Company’s nutritional and dietary supplements are laced with illegal drugs, including picamilon, a Russian prescription medicine for neurological conditions, and BMPEA, which was first synthesized in 1930 as a replacement for amphetamines and never studied in humans. When the truth was revealed, shares dropped causing investors harm.