Deadline Reminder: Law Offices of Howard G. Smith Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Root, Inc. (ROOT)
BENSALEM, Pa.–(BUSINESS WIRE)–$ROOT #CLASSACTION–Law Offices of Howard G. Smith reminds investors of the upcoming May 18, 2021 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired Root, Inc. (“Root” or the “Company”) (NASDAQ: ROOT): (a) securities between October 28, 2020 and March 8, 2021, inclusive (the “Class Period”); and/or (b) Root Class A common stock pursuant and/or traceable to the Offering Documents issued in connection with the Company’s initial public offering on or about October 28, 2020 (the “IPO” or “Offering”).
Investors suffering losses on their Root investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to [email protected].
On December 1, 2020, post-market, Root announced its third quarter 2020 financial results, reporting revenues of $50.5 million (or down 36.6% year-over-year) and earnings per share (“EPS”) of -$2.20 per share (missing consensus estimates by $1.79 per share).
On this news, the Company’s stock fell $2.30, or over 13%, to close at $14.70 per share on December 2, 2020.
Then, on February 25, 2021, post-market, Root announced its fourth quarter and full year 2020 financial results, reporting EPS of -$0.72, missing consensus estimates by $0.07 per share.
On this news, the Company’s stock fell $2.93, or nearly 18%, to close at $13.49 per share on February 26, 2021.
Then, on March 9, 2021, BofA Securities analyst Joshua Shanker initiated coverage of Root with an “Underperform” rating on the premise that the Company is unlikely to be cash flow positive until 2027, finding that Root “will require not insignificant cash infusions from the capital markets to bridge its cash flow needs.” The report stated that already established market players would continue to impede the Company’s profitability with superior telematics data and their dominant market positions.
On this news, stock price fell $0.18 per share, or 1.46%, to close at $12.17 per share on March 9, 2021, representing a 55% decline from the IPO price.
The complaint filed alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Offering Documents and Defendants failed to disclose to investors that: (1) Root would foreseeably fail to generate positive cash flow for at least several years following the IPO; (2) accordingly, the Company would foreseeably require significant cash infusions to meet its cash flow needs; (3) notwithstanding the Defendants’ touting of Root’s purportedly unique, data-driven advantages, several of the Company’s established industry peers in fact possessed significant competitive advantages over Root with respect to, inter alia, telematics data and data engagement; and (4) as a result, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.
If you purchased or otherwise acquired Root securities during the Class Period and/or Class A common stock pursuant to the IPO, you may move the Court no later than May 18, 2021 to ask the Court to appoint you as lead plaintiff if you meet certain legal requirements. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to [email protected], or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
215-638-4847
888-638-4847
[email protected]
www.howardsmithlaw.com
