LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay & Murray LLP (“GPM”), announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York captioned Morton v. Leidos Holdings, Inc., et al., (Case No. 1:21-cv-01911) on behalf of persons and entities that purchased or otherwise acquired Leidos Holdings, Inc. (“Leidos” or the “Company”) (NYSE: LDOS) securities between May 4, 2020 and February 23, 2021, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have until 60 days from this notice to move the Court to serve as lead plaintiff in this action.
If you suffered a loss on your Leidos investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at https://www.glancylaw.com/cases/leidos-holdings-inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at email@example.com or visit our website at www.glancylaw.com to learn more about your rights.
On February 16, 2021, Spruce Point Capital Management LLC (“Spruce Point”) published a research report, alleging, among other things that “Leidos is potentially covering up at least $100m of fictitious sales, mischaracterizing $355 - $367m of international revenue.” The report also alleged that the Company was “concealing numerous product defects from investors, notably faulty explosive detection systems at airports and borders.”
On this news, the Company’s share price fell $2.58, or 2.4%, to close at $105.22 per share on February 16, 2021, on unusually heavy trading volume.
On February 23, 2021, Leidos announced its fourth quarter and full year 2020 financial results in a press release. Therein, the Company reported $89 million revenue related to the SD&A businesses for the fourth quarter, meaning that after two full quarters, the acquisition generated only $163 million in sales (or $326 million annualized), falling well short of projected $500 million sales. The Company expected cash flow of $850 million, well below analyst estimates of $1.083 billion.
On this news, the Company’s stock price fell $10.29, or 9.91%, to close at $93.51 per share on February 23, 2021.
On February 24, 2021, Spruce Point highlighted that Leidos had “materially expanded” the risk disclosures in its annual report for the year ended December 31, 2020. Spruce Point tweeted: “We believe it is validating all the major points of our report.”
On this news, the Company’s stock price fell $3.13, or 3.3%, to close at $90.38 per share on February 24, 2021, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the purported benefits of the Company’s acquisition of L3Harris’ Security Detection & Automation businesses were significantly overstated; (2) that Leidos’ products suffered from numerous product defects, including faulty explosive detection systems at airports, ports, and borders; (3) that, as a result of the foregoing, the Company’s financial results were significantly overstated; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased or otherwise acquired the Leidos securities during the Class Period, you may move the Court no later than 60 days from this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to firstname.lastname@example.org, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
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