U.S. Xpress Enterprises, Inc.
- Company Name
- U.S. Xpress Enterprises, Inc.
- Stock Symbol
- Class Period
- Purchasers of U.S. Xpress common stock pursuant and/or traceable to the Company’s June 2018 initial public offering
- Motion Deadline
- May 10, 2019
- Eastern District of Tennessee
The complaint charges U.S. Xpress, certain of its officers and directors and the underwriters of its June 2018 initial public offering (“IPO”) with violations of the Securities Act of 1933. U.S. Xpress is the fifth largest asset-based truckload carrier by revenue in the United States. The Company provides services using both its own truckload fleet and third-party carriers. U.S. Xpress’s fleet consists of more than 6,800 tractors and approximately 16,000 trailers.
On May 7, 2018, the Company filed a registration statement on Form S-1 with the SEC, which, after amendment, was declared effective on June 13, 2018 (the “Registration Statement”). The prospectus for the IPO was filed with the SEC on June 15, 2018, and the Company sold more than 16.6 million shares of common stock at $16 per share for net proceeds to U.S. Xpress of approximately $245.2 million.
The complaint alleges that the Registration Statement for the IPO omitted material information regarding the Company’s business prospects and financial health that was known at the time of the IPO. Specifically, the Registration Statement failed to disclose, among other things, that U.S. Xpress’s cost per mile for driver wages and independent contractors was exceeding the Company’s internal expectations, that a shortage of trucks was negatively impacting U.S. Xpress’s dedicated division, and that certain shipping patterns had been performing differently than expected, which was having a negative impact on utilization and driver retention and hiring, which, in turn, was negatively affecting certain of U.S. Xpress’s dedicated accounts.
On November 1, 2018, U.S. Xpress announced its financial results for the third quarter of 2018. In the Company’s press release and conference call discussing the results, the Company disclosed that unusual shipping patterns were impacting its segments and that market challenges for drivers had resulted in a year-to-year tractor count decrease. In addition, the Company was experiencing higher driver wages and independent contractor costs, lower than expected recruitment levels, and a higher insurance expense. On this news, the price of U.S. Xpress common stock fell nearly 30% to close at $7.10 per share on November 2, 2018. Less than a year after the IPO, U.S. Xpress stock was trading at around $7.80 per share, a decline of more than 50% from the IPO price.