NEW YORK–(BUSINESS WIRE) – Scott + Scott Attorneys at Law LLP (“Scott + Scott”), an international shareholder and consumer litigation firm, announces the filing of a class action lawsuit against Root, Inc. (“Root” or the “Company”). (NASDAQ: ROOT) and some of its officers alleging violations of federal securities laws. If you purchased Root Securities between October 28, 2020 and March 8, 2021 (including the “Class Period”) and suffered a loss, please contact Attorney Joseph Pettigrew for more information at (844) 818- 6982 or contact [email protected] The lead plaintiff’s deadline is May 18, 2021.
Root offers insurance products and services in the United States. The company has historically focused on auto insurance and operates a direct-to-consumer model that serves customers primarily through mobile applications as well as through the company’s website. The company held its initial public offering (“IPO”) on October 28, 2020 at a price of $ 27 per share.
The lawsuit alleges, among other things, that the company made materially false and / or misleading statements and / or failed to disclose: (1) Root is unlikely to generate positive cash flow for several years after going public. ;; (2) Accordingly, the company would predictably require significant cash infusions to meet its cash flow needs. and (3) notwithstanding Defendants’ promotion of the allegedly unique, data-driven advantages of Root, some of the company’s established industry peers actually had significant competitive advantages over Root, including in relation to telematics data and data binding.
On March 9, 2021, several investor news reports reported that, despite the company’s prior assurances that it was cash, a Bank of America analyst had initiated reporting on Root with an “underperform” rating on the assumption that it was unlikely Is That The Company Is Cash A positive investor report on Finding Alpha found the company lacked the telematics or data advantages over other insurers that the company had touted throughout the class period. The Seeking Alpha report also states that Root’s competitor Progressive, which has been using telematics for 20 years, has “a significant advantage over Root in terms of both the amount of data and the preoccupation with the data.”
In that news, the company’s share price fell $ 0.18 per share, or 1.46%, to close at $ 12.17 per share on March 9, 2021, an overall decrease of over 50% from its IPO.
What you can do
If you purchased Root Securities between October 28, 2020 and March 8, 2021 inclusive, or have any questions about this notice or your statutory rights, please contact Attorney Joseph Pettigrew (844) 818-6982 or jpettigrew @ scott- scott.com.
About Scott + Scott Lawyers LLP
Scott + Scott has extensive experience pursuing key securities, antitrust, and retirement plan actions in the United States. The company represents pension funds, foundations, individuals and other companies worldwide with offices in New York, London, Connecticut, California and Ohio.