SAN DIEGO & SANTA CLARA, Calif.--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that it is investigating eHealth, Inc. (NASDAQ: EHTH) for alleged violations of the Securities Exchange Act of 1934 and whether the Company's officers and directors breached their fiduciary duties to shareholders. 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 Concealing its Highly Unprofitable Business
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." 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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