ServiceMaster Global Holdings, Inc. Class Action Lawsuit
- Company Name
- ServiceMaster Global Holdings, Inc.
- Stock Symbol
- Class Period
- February 26, 2019 to November 4, 2019
- Motion Deadline
- June 9, 2020
- Southern District of New York
The ServiceMaster Global Holdings, Inc. securities class action lawsuit charges ServiceMaster and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of ServiceMaster common stock between February 26, 2019 and November 4, 2019 (the “Class Period”). The ServiceMaster securities class action lawsuit was commenced on April 10, 2020 in the Southern District of New York and is captioned Ruttenberg v. ServiceMaster Global Holdings, Inc., No. 20-cv-02976.
ServiceMaster is a provider of essential services to residential and commercial customers in the termite, pest control, cleaning, and restoration markets. ServiceMaster’s largest and most profitable business segment is Terminix, a termite and pest control business that operates primarily in the United States. Among other services, Terminix offers an annual coverage plan for its termite customers, which indemnifies the customer against the cost of treatment and repairs.
The ServiceMaster securities class action lawsuit alleges that during the Class Period, defendants made material misrepresentations to the market, repeatedly assuring investors that ServiceMaster was successfully executing upon initiatives to improve the performance in its Terminix business. In addition, defendants stated that the Terminix business would reach a positive “inflection point” and was “definitely the driver” for positive trends expected in the second half of 2019. Unbeknownst to investors, however, during the past several years the Terminix business had experienced an adverse trend of costly termite litigation, primarily related to Formosan termite activity. As a result of defendants’ misrepresentations during the Class Period, the price of ServiceMaster common stock was artificially inflated to more than $57 per share.
On October 22, 2019, ServiceMaster announced disappointing preliminary financial results for the third quarter of 2019, missing its revenue and earnings estimates, and issued downward adjusted EBITDA guidance. ServiceMaster attributed the disappointing results to “termite damage claims arising primarily from Formosan termite activity,” primarily in Mobile, Alabama. The release further stated that defendants had known about this issue “starting in 2018,” when ServiceMaster began taking mitigating measures. In addition, ServiceMaster announced the sudden departure of Matthew J. Stevenson, the President of Terminix Residential. On this news the price of ServiceMaster common stock fell $11.44 per share, or 20%, to close at $44.70 per share on October 22, 2019.
Then, on November 5, 2019, ServiceMaster released its third quarter 2019 financial results, which had been adversely impacted by certain “legacy risks,” including “termite damage claims.” The same day, defendants held an earnings call with analysts and investors to discuss ServiceMaster’s results. On the call, defendants disclosed that the increase in termite litigation – which had occurred over “the past few years” – had impacted termite revenue and that these issues would continue throughout 2020. On this news, the price of ServiceMaster common stock fell $1.42 per share, or 3.5%, to close at $39.15 per share on November 5, 2019. As the market continued to digest the disappointing news, the price of ServiceMaster stock declined further, falling by $3.41 per share, or 9%, to close at $35.74 per share on November 6, 2019.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased ServiceMaster common stock during the Class Period to seek appointment as lead plaintiff in the ServiceMaster securities class action lawsuit. A lead plaintiff will act on behalf of all other class members in directing the ServiceMaster securities class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the ServiceMaster securities class action lawsuit. An investor’s ability to share in any potential future recovery of the ServiceMaster securities class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the ServiceMaster securities class action lawsuit or have questions concerning your rights regarding the ServiceMaster securities class action lawsuit, please provide your information here or contact counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. Lead plaintiff motions for the ServiceMaster securities class action lawsuit must be filed with the court no later than June 9, 2020.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.