Saxena white p.a. files securities fraud class action against covetrus, inc. and henry schein, inc

Saxena white p.a. has filed a securities fraud class action lawsuit in the united states district court for the eastern district of new york against covetrus, inc. (“covetrus” or the “company”), certain of its executive officers, and henry schein inc. (“henry schein”) (collectively, “defendants”) on behalf of all persons or entities who purchased or otherwise acquired covetrus common stock between february 8, 2019 and august 12, 2019, inclusive (the “class period”). on august 13, 2019, before the market opened, covetrus shocked investors by reporting a net loss of $0.09 per share for the second quarter of 2019 compared to consensus analyst estimates of $0.17 in net income per share. covetrus also slashed its 2019 ebitda guidance to just $200 million, down substantially from its prior ebitda guidance of approximately $250 million issued in february and may 2019, only a few months prior. in doing so, covetrus admitted that the company would have to spend tens of millions of dollars more in infrastructure spending and redundant costs. the company also admitted previously undisclosed difficulties integrating the platforms and disclosed increased spending to eliminate obligations to henry schein as part of the spin-off agreement. the complaint asserts claims for violations of sections 10(b) and 20(a) of the securities exchange act of 1934 against covetrus, henry schein and certain of covetrus’ senior executives. the action alleges that during the class period, defendants issued a series of false and/or misleading statements and failed to disclose material adverse facts about covetrus’ business, operations, and prospects. specifically, defendants’ representations to investors: (i) overstated covetrus’ capabilities with regard to inventory management and supply chain services; (ii) understated the costs of the integration of henry schein’s animal health business and vfc, including the timing and nature of those costs; (iii) understated covetrus’ separation costs from henry schein; and (iv) understated the impact on earnings from online competition and alternative distribution channels as well as the impact of the loss of a large customer in north america just prior to the company’s separation from henry schein.
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