- Company Name
- ADT Inc.
- Stock Symbol
- Class Period
- January 23, 2018 IPO
- Motion Deadline
- July 20, 2018
- Southern District of Florida
The complaint charges ADT and certain of its officers with violations of the Securities Act of 1933. ADT is a home security company taken private by Apollo Global in May 2016 and taken public again via the January 2018 initial public offering (“IPO”). The IPO occurred on January 23, 2018 in which the Company sold 105 million shares at $14 per share.
The complaint alleges that the IPO offering documents contained materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, ADT’s discussions of risk factors in its IPO Registration Statement omitted or inadequately described several risks including the then already occurring 75% increase in year-over-year losses, the complete yet undisclosed negative fourth quarter and fiscal year 2017 results and trends, and ADT’s dependence on the federal income tax cuts to meet even the extreme low end of its 2017 estimate ranges.
On March 15, 2018, ADT announced its disappointing fourth quarter and full year 2017 earnings and other financial results, reporting a loss of $0.06 per share, excluding one-time items, versus expected earnings of $0.10-$0.14 per share.
On this news, the price for ADT shares declined nearly 20%, from a high of $10.72 per share on March 15, 2017, to a low of $8.63 per share on March 16, 2017. As of the time of the filing of this action, ADT shares continue to trade below $9 per share, a decline of over 35% from the $14 per share offering price.