Ryder System, Inc. Class Action Lawsuit
- Company Name
- Ryder System, Inc.
- Stock Symbol
- Class Period
- July 23, 2015 to February 13, 2020
- Southern District of Florida
The Ryder System, Inc. class action lawsuit charges Ryder System and certain of its current and former senior executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Ryder System’s common stock between July 23, 2015 and February 13, 2020 (the “Class Period”). The Ryder System class action lawsuit was commenced on May 20, 2020 in the Southern District of Florida and is captioned Key West Police & Fire Pension Fund v. Ryder System, Inc., No. 20-cv-60997.
Ryder System is a global provider of transportation and supply chain management solutions.
The Ryder System class action lawsuit alleges that the defendants failed to disclose that Ryder System’s financial results were inflated as a result of Ryder System’s practice of overstating the residual values of the vehicles in its fleet, because there was no reasonable basis to believe that Ryder System would sell its used vehicles for the amounts that it had assigned to them. In reality, Ryder System’s residual values for its fleet of vehicles exceeded the expected future values that would be realized upon the sale of those vehicles by such a degree that Ryder System ultimately took a $357 million depreciation charge in 2019 related to Ryder System’s reduction of its residual values to align them with the amounts for which they could realistically be sold.
The truth began to emerge on July 30, 2019, when Ryder System drastically reduced its full-year 2019 earnings forecast and management indicated that the majority of the lowered guidance reflected Ryder System’s weaker valuations of its tractors. On this news, Ryder System’s stock price declined 10%.
Then, on October 29, 2019, Ryder System revealed that “management concluded that our residual value estimates likely exceeded the expected future values that would be realized upon the sale of power vehicles in our fleet.” As a result, Ryder System significantly lowered the residual values for all its vehicles and incurred $177 million in additional depreciation expense in the third quarter of 2019. On this news, Ryder System’s stock price declined more than 12% over two trading days.
Finally, on February 13, 2020, Ryder System reported that, as a result of the significant reductions to the residual value of its fleet, it had incurred a total of $357 million in depreciation expense for 2019, plus a loss of approximately $58 million on the sale of used vehicles. Ryder System also announced that, for 2020, it expected to incur another $275 million in depreciation expense on its fleet due to the reductions in residual value plus an additional $20 million estimated loss on used vehicle sales. On this news, Ryder System’s stock price declined 20% over two trading days.
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