No fun at Funko as move from Everett goes south
Jun 8, 2023, 11:11 AM | Updated: 11:15 am
Everett took a big hit when Funko moved a large part of its operations to Arizona. Now, the bobblehead company faces a class action lawsuit from its investors.
The suit alleged that the company failed to tell investors that it was experiencing significant delays in the rollout of a new software program, critical “to the efficient operation of its new distribution center,” according to court documents obtained by The Everett Herald. The stock price fell by 18%.
In fact, one investor described the move from Everett to Arizona as “disastrous.”
The suit was filed in U.S. District Court last Friday. It said that the delay in software “would lead to dramatically higher costs and poorer inventory management practices,” resulting in “a substantial, undisclosed impact on Funko’s earnings” and “dramatically lower profit margins.” The suit claims that Funko did not adequately warn investors.
The lawsuit said Funko “repeatedly spoke of the necessity for these upgrades to serve current and future business needs. However, these statements were materially false and misleading or failed to disclose material information necessary to make these statements not misleading.”
When Funko took its toys and left town, it also left 250 workers behind.
The company said suburban Phoenix had a “more strategic” location and a strong talent pool.
Funko is known for its small, vinyl pop culture figures, board games, action toys, and accessories. The toymaker debuted its signature Pop! line of vinyl figures in 2010.
The company did not respond to requests for comment.