ROOT ALERT: Bragar Eagel & Squire, P.C. Announces That a Class Action Lawsuit Has Been Filed Against Root, Inc. and Encourages Investors to Contact the Firm
NEW YORK–(BUSINESS WIRE) – Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, has announced in the U.S. District Court for the Southern District of Ohio on behalf of investors that Root, Inc. (NASDAQ: ROOT) has filed securities between Jan. October 2020 and March 8, 2021, both dates inclusive (the “Class Period”); and / or Ordinary Class A Shares as set out in the Offer Documents issued and / or traceable in connection with the Company’s initial public offering on or about October 28, 2020 (“Initial Public Offering” or “Offering”). Investors have until May 18, 2021 to apply to the court for appointment as the lead plaintiff in the lawsuit.
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On October 5, 2020, Root filed a registration statement on Form S-1 with the SEC in connection with the initial public offering, which after several amendments was made effective on October 27, 2020 (the “Registration Statement”). On October 28, 2020, Root went public and sold 26.8 million Class A common shares of the company to the public at a price of $ 27.00 per share, for approximate total proceeds of $ 724.43 million.
On March 9, 2021, Bank of America (“BofA”) securities analyst Joshua Shanker (“Shanker”) initiated reporting on Root with an “underperform” rating, provided the company is expected to fail by 2027 Achieving positive cash flow will mean that Root “does not need insignificant cash inflows from the capital markets to meet his cash flow needs.” Shanker also noted that insurers Progressive, Allstate and Berkshire Hathaways Geico would continue to hurt the company’s profitability, with Progressive and Allstate having a “significant advantage over Root in terms of the amount of.” [telematics] Data as well as preoccupation with the data “used to evaluate their auto insurance.
In that news, Root’s share price fell $ 0.18 per share, or 1.46%, to close at $ 12.17 per share on March 9, 2021, a total of 54.93% decrease from the offer price.
The complaint filed on March 19, 2021 alleges that the offer documents were created negligently and therefore contained false statements about material facts or did not present other facts that were necessary in order not to make the statements misleading and were not prepared in accordance with them were familiar with the rules and regulations for their preparation. In addition, throughout the classroom, defendants made materially false and misleading statements about the company’s business, operational, and compliance policies. In particular, the Offer Documents and Defendants made false and / or misleading statements and / or did not disclose that: (i) Root would not be expected to generate positive cash flow for at least a few years after the IPO; (ii) accordingly, the company would likely require significant cash infusions to meet its cash flow needs; (iii) Notwithstanding Defendants’ advertising of the allegedly unique, data-driven advantages of Root, some of the Company’s established industry peers did in fact have significant competitive advantages over Root, including in relation to telematics data and data binding; and (iv) as a result, Defendants’ offer documents and public statements were materially inaccurate and / or misleading throughout the teaching period and did not contain any information to be included therein.
If you have purchased Root securities during the class period and have suffered a loss, are a long-term shareholder, have information, want to learn more about these claims, or have questions about this announcement or your rights or interests in relation to these matters, please contact Brandon Walker, Melissa Fortunato or Marion Passmore by email at email@example.com, by phone at (212) 355-4648, or by completing this contact form. There are no costs or obligations for you.
About Bragar Eagel & Squire, PC:
Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivatives and other complex litigation in state and federal courts across the country. More information about the company can be found at www.bespc.com. Lawyer advertising. Previous results do not guarantee similar results.