Bragar Eagel & Squire, PC reminds investors that class action lawsuits have been filed… | Your money
NEW YORK, Jan. 28, 2022 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, reminds investors that class action lawsuits have been filed on behalf of shareholders of eHealth. Inc. (NASDAQ: EHTH), First Solar, Inc. (NASDAQ: FSLR), Clarivate Plc (NYSE: CLVT) and Bumble, Inc. (NASDAQ: BMBL). Shareholders have until the deadlines below to ask the court to serve as lead plaintiff. Additional information on each case can be found at the link provided.
eHealth. Inc. (NASDAQ: EHTH)
Course period: April 26, 2018 – July 23, 2020
Lead Applicant Deadline: March 18, 2022
eHealth is a health insurance broker that focuses on selling Medicare-related policies on behalf of private insurers. Its primary source of revenue is commissions from the sale of Medicare Advantage, Medicare Supplement, and Medicare Part D prescription drug policies. On January 1, 2018, eHealth adopted and implemented a new accounting standard for revenue recognition. This standard, hereafter referred to as Accounting Standard Codification 606 or ASC 606, allowed eHealth to immediately recognize all of the commissions it expected to receive over the expected life of the policies. Although eHealth sold annual policies that could be canceled at any time by the consumer, it assumed that its policies would be renewed for several years. Therefore, for many of eHealth’s Medicare-related policies, it recognized between three and five years of commissions immediately after the policy was sold.
The lawsuit in the class action alleges that the assumption that eHealth customers would renew their policies was unrealistic and contrary to eHealth’s recent experience with cancellations and renewals. Beginning in 2017, eHealth began soliciting Medicare customers with television advertising. The late night ads offering $0 monthly bonuses actually generated an increase in customers in a short period of time. Between 2017 and 2018, the number of Medicare-related insurance claims submitted to eHealth by claimants increased by 39%. These customers, however, were known to cancel their policies over short periods of time, leading eHealth to experience skyrocketing “membership turnover” rates, i.e. the percentage of customers who cancel their policies in the first year. Nevertheless, eHealth was able to provide analysts and investors with record earnings due to the fact that it was able to recognize in advance and immediately three to five year commission earnings for these policies.
The complaint further alleges that class members were materially harmed by eHealth’s false and misleading statements. As a direct result of defendants’ materially false and misleading statements, eHealth’s stock price artificially rose from a relatively flat price of approximately $15.32 per common share on March 19, 2018 to $136.32 before April 8, 2020. It was that day. that Muddy Waters Capital, a well-known and well-respected research firm, released a report exposing eHealth’s accounting misconduct. The report revealed, among other things, that eHealth’s “very aggressive accounting masks”  a significantly unprofitable business”, “that the primary driver of growth since 2018 has been EHTH’s reliance on direct response television advertising, which attracts an unprofitable and high churn subscriber”, “that the assumptions persistence of EHTH in its LTV model [under ASC 606] seem very aggressive compared to reality. The Muddy Waters report also found that eHealth’s financial statements for 2019: (a) overstated revenue by $128 million; (b) an overstated operating profit of $263 million; and (c) understated an operating loss of -$181 million. The Muddy Waters report led to a sharp decline in eHealth’s stock price, which fell to $103.20 per share.
Subsequently, on July 23, 2020, when eHealth announced its results for the second quarter of fiscal 2020, its share price fell again as information in its announcement confirmed substantial aspects of the allegations of “membership churn” previously asserted in the Muddy Waters. report. In response, eHealth’s stock price fell from a closing price of $114 per share on July 23, 2020 to $79.17 per share on July 24, 2020.
For more information on the eHealth class action, please visit: https://bespc.com/cases/EHTH
First Solar, Inc. (NASDAQ: FSLR)
Course period: February 22, 2019 – February 20, 2020
Lead Applicant Deadline: March 8, 2022
On January 15, 2020, Barclays reported that First Solar had “apparently been, largely, priced out of the U.S. downstream solar market” and that the company had concealed its rapidly declining market share through misleading financial reports by including projects in its Project Development Pipeline that had actually been completed in previous years.
On this news, First Solar’s stock fell $4.03, or 7%, to close at $54.75 per share on January 15, 2020, hurting investors.
Then, on February 6, 2020, Barclays said that, in an attempt to regain market share, First Solar was “bidding more aggressively, driving down [Project Development contract] price, and finally reduce margins.
On this news, First Solar’s stock fell $0.45 to close at $52.65 per share on Feb. 6, 2020, further hurting investors.
Then, on February 20, 2020, First Solar announced that it was considering selling its project development business. The company also revealed that it was experiencing “challenges with certain aspects of the overall cost per watt” and would not meet its cost per watt targets.
On this news, First Solar’s stock fell $8.73, or 15%, to close at $50.59 per share on Feb. 21, 2020, further hurting investors.
For more information on the First Solar class action, please visit: https://bespc.com/cases/FSLR
Clarivate Plc (NYSE:CLVT)
Course period: February 26, 2021 – December 27, 2021
Lead Applicant Deadline: March 25, 2022
Clarivate is an information and analytical services company that provides structured information and analysis for the discovery, protection and commercialization of scientific research, innovations and brands.
On December 27, 2021, Clarivate disclosed in a filing with the United States Securities and Exchange Commission that “[o]n December 22, 2021, Clarivate . . . concluded that the financial statements previously issued as at and for the fiscal year ended December 31, 2020 and the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021 should no longer be relied upon due to an error in these financial statements[.]Specifically, Clarivate reported that “[t]The error relates to the treatment under United States generally accepted accounting principles (‘GAAP’) relating to a share plan included in the CPA Global business combination which was completed on October 1, 2020 (‘the transaction Global CPA’). In the relevant financial statements, certain awards made by CPA Global under its stock ownership plan were incorrectly included as part of the acquisition accounting for the CPA Global transaction.
On this news, Clarivate stock price declined $1.70 per share, or approximately 6.92%, from $23.58 per share to close at $22.88 per share on December 28, 2021.
For more information on the Clarivate survey, visit: https://bespc.com/cases/CLVT
Bumble, Inc. (NASDAQ: BMBL)
Course period: September 10, 2021 SPO
Lead Applicant Deadline: March 25, 2022
According to the lawsuit, the SPO’s registration statement contained misrepresentations of material facts because it failed to state that: (1) Bumble’s paid user growth trends had abruptly reversed in 3Q21 and Bumble had in fact lost tens of thousands of paying users in the quarter; (2) paid users had been more reluctant to sign up for the Bumble app during 3Q21 due to recent price increases for paid services on the app; (3) a significant number of paying users were leaving the Badoo App and/or unable to make payments through the Badoo App due, in large part, to issues resulting from Bumble’s transition of its payment platform; and (4) as a result, Bumble’s business metrics and financial outlook were not as strong as the registration statement had represented. When the real details entered the market, the lawsuit claims investors suffered damages.
For more information on the Bumble class action, visit: https://bespc.com/cases/BMBL
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 before state and federal courts across the country. For more information about the company, please visit www.bespc.com. Lawyer advertisement. Prior results do not guarantee similar results.