NEW YORK, Jan. 28, 2022 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of eHealth. Inc. (NASDAQ: EHTH), First Solar, Inc. (NASDAQ: FSLR), Clarivate Plc (NYSE: CLVT), and Bumble, Inc. (NASDAQ: BMBL). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
eHealth. Inc. (NASDAQ: EHTH)
Class Period: April 26, 2018 – July 23, 2020
Lead Plaintiff Deadline: March 18, 2022
eHealth is a health insurance broker that focuses on selling Medicare-related policies on behalf of private insurers. Its main source of revenue is commissions from selling Medicare Advantage, Medicare Supplement, and Medicare Part D prescription drug policies. On January 1, 2018, eHealth adopted and implemented a new accounting standard for recognizing revenue. This standard, referred to herein as Accounting Standard Codification 606 or ASC 606, allowed eHealth to recognize immediately the entirety of the commissions it expected to receive over the expected life of the policies. Although eHealth sold annual policies that could be cancelled at any time by the consumer, it assumed that its policies would be renewed for several years. Consequently, for many of eHealth’s Medicare-related policies, it recognized between three and five years of commissions immediately upon the sale of the policy.
The Complaint in the Class Action alleges that the assumption that eHealth’s customers would renew its policies was unrealistic and contrary to eHealth’s recent experience of both cancellations and renewals. Beginning in 2017, eHealth started soliciting Medicare customers with television advertising. Late-night commercials boasting $0 monthly plan premiums effectively generated a surge in customers in a short period of time. Between 2017 and 2018, the number of Medicare-related insurance applications submitted to eHealth by applicants grew by 39%. These customers, however, were notorious for cancelling their policies in short periods of time, causing eHealth to experience sky-rocketing “member churn” ratios, i.e., the percentage of customers who cancel their policies within the first year. Notwithstanding, eHealth was able to provide analysts and investors with record-setting earnings due to the fact that it was able to recognize three- to five-years of commission revenue for these policies upfront and immediately.
The Complaint further alleges that Class members were materially harmed by eHealth’s false and misleading statements. As a direct result of Defendants’ materially false and misleading statements, eHealth’s stock price artificially increased from a relative steady price of around $15.32 per share of common stock on March 19, 2018 to $136.32 prior to April 8, 2020. It was on that day that Muddy Waters Capital, a well-known and highly respected research firm, published a report revealing eHealth’s accounting misconduct. The report disclosed, among other things, that eHealth’s “highly aggressive accounting masks [] a significantly unprofitable business,” “that the key driver of growth since 2018 has been EHTH’s reliance on Direct Response television advertising, which attracts an unprofitable, high churn enrollee,” “that EHTH’s persistence assumptions in its LTV model [under ASC 606] seem highly aggressive when compared to reality.” Muddy Waters report also disclosed that eHealth’s financial statements for 2019: (a) overstated revenue by $128 million; (b) overstated operating profit by $263 million; and (c) understated an operating loss of -$181 million. The Muddy Waters report resulted in a sharp decline in the price of eHealth’s stock, plummeting to $103.20 per share.
Subsequently, on July 23, 2020, when eHealth announced its earnings results for the second quarter of fiscal 2020, its stock price fell again as the information contained in its announcement confirmed substantive aspects of the “member churn” allegations previously asserted in the Muddy Waters report. In response, eHealth’s stock price declined from a closing price of $114 per share on July 23, 2020 to $79.17 per share on July 24, 2020.
For more information on the eHealth class action go to:
https://bespc.com/cases/EHTH
First Solar, Inc. (NASDAQ: FSLR)
Class Period: February 22, 2019 – February 20, 2020
Lead Plaintiff Deadline: March 8, 2022
On January 15, 2020, Barclays reported that First Solar had “seemingly been, in large part, priced-out of the U.S. downstream solar market” and that the Company had concealed its rapidly declining market share through misleading financial reporting by including projects in its Project Development pipeline that had actually been completed in prior years.
On this news, First Solar’s stock fell $4.03, or 7%, to close at $54.75 per share on January 15, 2020, thereby injuring investors.
Then, on February 6, 2020, Barclays stated that, in an attempt to gain back its market share, First Solar was “bidding more aggressively, leading to lower [Project Development contract] prices, and finally cutting into margins.”
On this news, First Solar’s stock fell $0.45 to close at $52.65 per share on February 6, 2020, thereby injuring investors further.
Then, on February 20, 2020, First Solar announced that it was exploring a sale of its Project Development Business. The Company also disclosed that it was experiencing “challenges with regard to certain aspects of the overall cost per watt” and that it would not be realizing its cost per watt goals.
On this news, First Solar’s stock fell $8.73, or 15%, to close at $50.59 per share on February 21, 2020, thereby injuring investors further.
For more information on the First Solar class action go to:
https://bespc.com/cases/FSLR
Clarivate Plc (NYSE: CLVT)
Class Period: February 26, 2021 – December 27, 2021
Lead Plaintiff Deadline: March 25, 2022
Clarivate is an information services and analytics company that provides structured information and analytics for discovery, protection, and commercialization of scientific research, innovations, and brands.
On December 27, 2021, Clarivate disclosed in a filing with the U.S. Securities and Exchange Commission that “[o]n December 22, 2021, Clarivate . . . concluded that the financial statements previously issued as of and for the year ended December 31, 2020, and the quarterly periods ended March 31, 2021, June 30, 2021, and September 30, 2021, should no longer be relied upon because of an error in such financial statements[.]” Specifically, Clarivate reported that “[t]he error relates to the treatment under U.S. generally accepted accounting principles (‘GAAP’) relating to an equity plan included in the CPA Global business combination which was consummated on October 1, 2020 (‘the CPA Global Transaction’). In the affected financial statements, certain awards made by CPA Global under its equity plan were incorrectly included as part of the acquisition accounting for the CPA Global Transaction.”
On this news, Clarivate’s stock price declined by $1.70 per share, or approximately 6.92%, from $23.58 per share to close at $22.88 per share on December 28, 2021.
For more information on the Clarivate investigation go to:
https://bespc.com/cases/CLVT
Bumble, Inc. (NASDAQ: BMBL)
Class Period: September 10, 2021 SPO
Lead Plaintiff Deadline: March 25, 2022
According to the lawsuit, the SPO’s registration statement contained inaccurate statements of material fact because it failed to disclose that: (1) Bumble’s paying user growth trends had abruptly reversed in 3Q21 and Bumble had actually lost tens of thousands of paying users during the quarter; (2) paying users had been more reluctant to sign up for the Bumble app during 3Q21 because of the recent price hike for paid services on the app; (3) a material number of paying users were leaving the Badoo app and/or could not make payments through the Badoo app due, in substantial part, to problems arising from Bumble’s transition of its payment platform; and (4) as a result, Bumble’s business metrics and financial prospects were not as strong as the registration statement had represented. When the true details entered the market, the lawsuit claims that investors suffered damages.
For more information on the Bumble class action go to:
https://bespc.com/cases/BMBL
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. 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
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Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Alexandra B. Raymond, Esq.
(212) 355-4648
[email protected]
www.bespc.com
