NEW YORK, March 31, 2021 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Sequential Brands Group, Inc. (NASDAQ: SQBG), CytoDyn, Inc. (Other OTC: CYDY), Lordstown Motors Corp. (NASDAQ: RIDE) and Root, Inc. (NASDAQ: ROOT). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Sequential Brands Group, Inc. (NASDAQ: SQBG)
Class Period: November 3, 2016 to December 11, 2020
Lead Plaintiff Deadline: May 17, 2021
On February 28, 2018, Sequential Brands Group issued a press released entitled “Sequential Brands Group Announces Fourth Quarter and Full Year 2017 Financial Results” which belatedly announced the goodwill adjustment.
On this news, Sequential Brands Group’s stock price fell $6.80 per share, or 8%, to close at $76.00 per share on February 28, 2018.
Then on December 11, 2020, the SEC filed a Complaint alleging that the Company failed “to take into consideration clear, objective evidence of likely goodwill impairment, which avoided and delayed a material write down to goodwill in the fourth quarter of 2016 and the first three quarters of 2017 (the ‘Relevant Period’).”
On this news, Sequential Brands Group’s stock price fell $2.03 per share, or 11%, to close at $16.20 per share on December 11, 2020.
The complaint, filed on March 16, 2021, alleges that throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) in late 2016, the Company knew or should have known that its goodwill was likely impaired; (2) the Company avoided and delayed the material write down to goodwill in late 2016 through 2017; (3) the Company understated its operating expenses and net loss and also materially overstated its income from operations, goodwill, and assets from late 2016 through 2017; (4) the Company’s internal controls were deficient; (5) the Company has failed to restate, correct, or disclose relevant improprieties, deceptive conduct, misstatements, omissions, and control violations; (6) as a result of the foregoing, the Company was at greater risk of regulatory scrutiny and enforcement; and (7) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
For more information on the Sequential Brands class action go to: https://bespc.com/cases/SQBG
CytoDyn, Inc. (Other OTC: CYDY)
Class Period: March 27, 2020 to March 9, 2021
Lead Plaintiff Deadline: May 17, 2021
CytoDyn is focused on the development and commercialization of a drug named “Leronlimab” which has long been promoted as a potential therapy for HIV patients. Since the beginning of the global COVID-19 pandemic, however, CytoDyn has begun to aggressively tout Leronlimab as a treatment for COVID-19.
Beginning on March 5, 2021 CytoDyn began issuing press releases that described the results of Phase IIb/III testing data. In these releases, CytoDyn disclosed that the primary endpoint for the Leronlimab study (all-cause mortality at Day 28) was not statistically significant.
After closing at $4.05 on March 5, 2021, CytoDyn shares dropped over 28% to close at $2.91 on March 8, 2021. On March 9, 2021, CytoDyn shares dropped an additional 19% to close at $2.35.
The complaint, filed on March 17, 2021, alleges that defendants violated provisions of the Exchange Act by making false and misleading statements concerning Leronlimab being used as a treatment for Covid-19.
For more information on the CytoDyn class action go to: https://bespc.com/cases/CYDY
Lordstown Motors Corp. (NASDAQ: RIDE)
Class Period: August 3, 2020 to March 17, 2021
Lead Plaintiff Deadline: May 17, 2021
According to its website, Lordstown is an automotive company founded for the purpose of developing and manufacturing light duty electric trucks targeted for sale to fleet customers. The Company’s purported flagship vehicle is the “Endurance,” an electric full-size pickup truck.
On March 12, 2021, analyst Hindenburg Research published a scathing report on Lordstown entitled: “The Lordstown Motors Mirage: Fake Orders, Undisclosed Production Hurdles, and a Prototype Inferno.” In this report, Hindenburg noted that Lordstown has “no revenue and no sellable product,” and wrote that the Company “has misled investors on both its demand and production capabilities.” The Hindenburg report concluded that Lordstown’s “orders are largely fictitious and used as a prop to raise capital and confer legitimacy,” and that a former employee “explained how the company is experiencing delays and making ‘drastic’ design modifications, putting [Lordstown] an estimated 3-4 years away from production,” rather than the Company being “on track” for a September 2021 production start.
On this news, the price of Lordstown common stock fell approximately 16.5% in one day, down from its March 11, 2021 closing price of $17.71 to a March 12, 2021 close of just $14.78. This represents hundreds of millions of dollars in lost market capitalization.
Then on March 17, 2021, after trading had closed, the Company held an earnings call disclosing that Lordstown had received an inquiry from the SEC. Remarkably, although Lordstown also issued a press release and a Form 8-K announcing its fourth quarter and full year 2020 financial results after trading closed on March 17, 2021, the Company failed to disclose the existence of the SEC inquiry in those filings.
On this news, the stock fell approximately another 9% in aftermarket trading.
The complaint, filed on March 18, 2021, alleges that throughout the Class Period defendants made materially false and misleading statements regarding the Company’s business. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company’s purported pre-orders were non-binding; (ii) many of the would-be customers who made these purported pre-orders lacked the means to make such purchases and/or would not have credible demand for Lordstown’s Endurance; (iii) Lordstown is not and has not been “on track” to commence production of the Endurance in September 2021; (iv) the first test run of the Endurance led to the vehicle bursting into flames within 10 minutes; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.
For more information on the Lordstown Motors class action go to: https://bespc.com/cases/RIDE
Root, Inc. (NASDAQ: ROOT)
Class Period: Securities purchased between October 28, 2020 and March 8, 2021, both dates inclusive (the “Class Period”); and/or Root Class A common stock pursuant and/or traceable to the offering documents issued in connection with the Company’s initial public offering conducted on or about October 28, 2020 (the “IPO” or “Offering”).
Lead Plaintiff Deadline: May 18, 2021
On October 5, 2020, Root filed a registration statement on Form S-1 with the SEC in connection with the IPO, which, after several amendments, was declared effective on October 27, 2020 (the “Registration Statement”). On October 28, 2020, Root conducted the IPO, selling 26.8 million shares of the Company’s Class A common stock to the public at $27.00 per share for total approximate proceeds of $724.43 million.
On March 9, 2021, Bank of America (“BofA”) Securities analyst Joshua Shanker (“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.” Shanker also noted that insurers Progressive, Allstate, and Berkshire Hathaway’s Geico would continue to impede the Company’s profitability, with Progressive and Allstate having a “sizable advantage over Root in terms of amount of [telematics] data as well as engagement with the data” used to price their auto insurance.
On this news, Root’s stock price fell $0.18 per share, or 1.46%, to close at $12.17 per share on March 9, 2021, representing a total decline of 54.93% from the Offering price.
The complaint, filed on March 19, 2021, alleges that the offering documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the offering documents and defendants made false and/or misleading statements and/or failed to disclose that: (i) Root would foreseeably fail to generate positive cash flow for at least several years following the IPO; (ii) accordingly, the Company would foreseeably require significant cash infusions to meet its cash flow needs; (iii) 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 (iv) 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.
For more information on the Root class action go to: https://bespc.com/cases/ROOT
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. 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, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.