Notice of Lead Plaintiff Deadline for Shareholders in the Root, Inc. Class Action Lawsuit

SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a class action lawsuit has been filed in the Southern District of Ohio on behalf of purchasers of Root, Inc. (NASDAQ:ROOT) Class A common stock pursuant and/or traceable to Root’s offering documents issued in connection with Root’s initial public offering conducted on or about October 28, 2020 (the “IPO”); and/or (b) Root securities between October 28, 2020 and March 8, 2021, inclusive (the “Class Period”). The case is captioned Kolominsky v. Root, Inc., No. 21-cv-1197, and is assigned to Judge Edmund A. Sargus, Jr. The Root class action lawsuit charges Root and certain of its executives and directors with violations of the Securities Act of 1933 and/or the Securities Exchange Act of 1934.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Root Class A common stock pursuant and/or traceable to Root’s offering documents issued in connection with Root’s IPO and/or Root securities during the Class Period to seek appointment as lead plaintiff in the Root class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Root class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Root class action lawsuit. An investor’s ability to share in any potential future recovery of the Root class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Root class action lawsuit or have questions concerning your rights regarding the Root class action lawsuit, please visit our website by clicking here or contact Mary K. Blasy of Robbins Geller, at 800/449-4900 or 631-454-7719 or via e-mail at [e-mail]. Lead plaintiff motions for the Root class action lawsuit must be filed with the court no later than May 18, 2021.

Root provides insurance products and services in the U.S. Leading up to and following the IPO, Root described itself as an innovator in the personal insurance space with a new data- and technology-driven business model that was ready to disrupt traditional insurance markets and capture disproportionate market share, in part because of Root’s telematics-driven approach to insurance - i.e., the collection and transmission of vehicle-use data through devices. On October 28, 2020, Root conducted the IPO, selling 26.8 million shares of the Company’s Class A common stock to the public at $27.00 per share for total approximate proceeds of $724.43 million.

The Root class action lawsuit alleges that the IPO’s offering documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. The Root class action lawsuit further alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) Root would foreseeably fail to generate positive cash flow for at least several years following the IPO; (ii) accordingly, Root would foreseeably require significant cash infusions to meet its cash flow needs; (iii) notwithstanding the defendants’ touting of Root’s purportedly unique, data-driven advantages, several of Root’s established industry peers in fact possessed significant competitive advantages over Root with respect to, among other things, telematics data and data engagement; and (iv) as a result, the IPO’s offering documents and defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.

On March 9, 2021, Bank of America Securities analyst Joshua Shanker initiated coverage of Root with an “Underperform” rating on the premise that Root is unlikely to be cash flow positive until 2027, finding that Root “will also require not insignificant cash infusions from the capital markets to bridge its cash flow needs.” Shanker also noted that insurers Progressive, Allstate, and Berkshire Hathaway’s Geico would continue to impede Root’s profitability, with Progressive and Allstate having a “sizable advantage over Root in terms of amount of [telematics] data as well as engagement with the data” used to price their auto insurance. On this news, Root’s stock price declined. At the time the Root class action lawsuit was filed, Root’s stock price has continued to trade more than 50% below the $27.00 per share IPO price.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations, and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.