NEW YORK–(BUSINESS WIRE)–#classaction–Bragar Eagel & Squire, P.C., a nationally recognized shareholder law firm, announces that a class action lawsuit has been filed in the United States District Court for the District of Minnesota on behalf of investors that purchased Resideo Technologies, Inc. (NYSE: REZI) securities between October 29, 2018 and October 22, 2019 (the “Class Period”). Investors have until January 7, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Click here to participate in the action.
The Company was formed through a spin-off from Honeywell International Inc. on October 29, 2018. The Company began trading under the ticker symbol “REZI” on the New York Stock Exchange (“NYSE”) on October 29, 2018.
The complaint, filed on November 8, 2019, alleges that during the Class Period, Resideo continued to assure investors that the Company was poised to meet its 2018 guidance at the high end of its forecasted range, and more importantly, for 2019 the Company would achieve 4%+ organic growth and ~13% adjusted EBITDA margin. Further, while the Company acknowledged it had experienced operational disruptions (primarily administrative) in connection with the spin-off, defendants repeatedly assured investors that any negative effects of the spin-off were largely “behind [them]” or minimizing and reiterated their fiscal year (“FY”) 2019 guidance for the Company, stating as late as August 8, 2019 that the Company’s performance to date put it on track to make its FY19 revenue guidance. Each of these representations was materially false and misleading when made because defendants failed to disclose the following true facts, which were known to defendants or recklessly disregarded by them: (a) The negative operational effects of the spin-off were more substantial and persistent than disclosed and had negatively affected the Company’s product sales, supply chain, and gross margins, putting Resideo’s FY19 financial forecasts at risk; and (b) As a result of the foregoing, the Company’s financial guidance lacked a reasonable basis and the Company was not on track to make its FY19 guidance as claimed. As a result of defendants’ material misrepresentations and omissions, Resideo stock traded at artificially inflated prices of more than $26 per share during the Class Period.
Then, on October 22, 2019, Resideo shocked investors when it issued its preliminary financial results for the third quarter of 2019, announcing that it had missed revenue and earnings targets and was lowering its recently reaffirmed revenue outlook for FY19 by $80 million
Also on October 22, 2019, the Company announced that defendant Ragan, the Company’s CFO, would be leaving as of November 6, 2019.
Following these disclosures and a significant reduction in the Company’s outlook for free cash flow, Resideo’s stock price declined more than 40%, from a close of $15.23 per share on October 22, 2019 to a close of $9.50 per share on October 23, 2019.
If you purchased Resideo securities during the Class Period, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at email@example.com, or telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.