Bragar eagel & squire, p.c. announces class action lawsuit files against resideo technologies, inc

Bragar eagel & squire, p.c. announced 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. 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. 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.
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