SAN DIEGO & SANTA CLARA, Calif.--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of eHealth, Inc. (NASDAQ: EHTH) filed a class action complaint against the Company for alleged violations of the Securities Exchange Act of 1934 between March 19, 2018 and April 7, 2020. eHealth provides private health insurance exchange services to individuals, families, and small businesses in the United States and China.
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eHealth, Inc. (EHTH) Accused of Misleading Shareholders
According to the complaint, on January 22, 2019, eHealth issued a press release announcing its full year 2018 results, touting the Company's "operational achievements" and its ability "to exceed [its] revenue and EBITDA expectations for 2018." Throughout the relevant period, eHealth continued to reaffirm the Company's strong momentum with reports of increasing enrollment and revenue growth, each time attesting that the reports fairly represented "the financial condition and results of operations of eHealth, Inc." Contrary to eHealth's representations, on April 8, 2020, Muddy Waters Research published a report disclosing "eHealth's highly aggressive accounting masks what we believe is a highly unprofitable business" and that "the key driver of growth since 2018 has been [eHealth's] reliance on Direct Response television advertising, which attracts an unprofitable, high churn enrollee." As a result of its findings, Muddy Waters concluded that "[eHealth] management is, in our view, running a massive stock promotion." On this news, eHealth's stock price fell $12.82, or 12%, to close at $103.20 per share.
eHealth, Inc. (EHTH) Shareholders Have Legal Options
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