NEW YORK--(BUSINESS WIRE)--Scott+Scott Attorneys at Law LLP (“Scott+Scott”), an international shareholder and consumer rights litigation firm, announces the filing of a class action lawsuit against Root, Inc. (“Root” or the “Company”) (NASDAQ: ROOT) and certain of its officers, alleging violations of federal securities laws. If you purchased Root securities between October 28, 2020 and March 8, 2021, inclusive (the “Class Period”), and have suffered a loss, you are encouraged to contact attorney Joseph Pettigrew for additional information at (844) 818-6982 or email@example.com. The lead plaintiff deadline is May 18, 2021.
Root provides insurance products and services in the U.S. The Company was historically focused on auto insurance, and operates a direct-to-consumer model that serves customers primarily through mobile applications, as well as through the Company’s website. The Company held its Initial Public Offering (the “IPO”) on October 28, 2020, at a price of $27 per share.
The lawsuit alleges, among other things, that the Company made materially false and/or misleading statements and/or failed to disclose: that: (1) Root would foreseeably fail to generate positive cash flow for at least several years following its “IPO”; (2) accordingly, the Company would foreseeably require significant cash infusions to meet its cash flow needs; and (3) notwithstanding the Defendants’ touting of Root's purportedly unique, data-driven advantages, several of the Company's established industry peers in fact possessed significant competitive advantages over Root with respect to, among other things, telematics data and data engagement.
On March 9, 2021, despite the Company’s previous assurances that it was cash positive, multiple investor news resources reported that a Bank of America analyst had initiated coverage of Root with an “Underperform” rating on the premise that the Company is unlikely to be cash flow positive until June 2027. A report on Seeking Alpha revealed to investors that the Company did not have the telematics or data advantages over other insurance providers that the Company had touted throughout the Class Period. The Seeking Alpha report also stated that Root’s competitor, Progressive, which has been using telematics for 20 years, has a “sizable advantage over Root in terms of amount of data as well as engagement with the data.”
On this news, the Company’s stock price fell $0.18 per share, or 1.46%, to close at $12.17 per share on March 9, 2021, representing a total decline of over 50% from the IPO price.
What You Can Do
If you purchased Root securities between October 28, 2020 and March 8, 2021, inclusive, or if you have questions about this notice or your legal rights, you are encouraged to contact attorney Joseph Pettigrew (844) 818-6982 or firstname.lastname@example.org.
About Scott+Scott Attorneys at Law LLP
Scott+Scott has significant experience in prosecuting major securities, antitrust, and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide with offices in New York, London, Connecticut, California, and Ohio.