ServiceMaster investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, ServiceMaster is a leading 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 primarily operates in the U.S. Among other services, Terminix offers an annual coverage plan for its termite customers, which indemnifies the customer against the cost of treatments and repairs. Beginning in the last century, the Formosan termite (“Formosan”) was introduced to the U.S. and is the most invasive termite in America. Formosan activity is generally relegated to the U.S.’s Gulf Coast region. According to ServiceMaster, Mobile, Alabama is considered the most at-risk community for Formosan infestation.
The complaint alleges that, on October 22, 2019, before market open, ServiceMaster announced disappointing preliminary financial results for the third quarter 2019 as well as net income of $25 million versus $71 million during the third quarter of 2018. The press release attributed the disappointing results to “termite damage claims arising primarily from Formosan termite activity . . . concentrated in Mobile, Alabama,” which had “been increasing over the last few years.” ServiceMaster had never mentioned Formosan or Mobile, Alabama, in its quarterly or annual SEC filings throughout the Class Period. Following this news, the price of ServiceMaster’s common stock fell $11.44 or 20%, closing at $44.70 on October 22, 2019, down from its $56.14 closing price on October 21, 2019.
Then, on November 5, 2019, before the start of trading, ServiceMaster released its final third quarter 2019 financial results, which mirrored the preliminary third quarter 2019 results. In this press release, ServiceMaster revealed that it had been impacted by certain “legacy risks,” including “termite damage claims.” Following this news the price of ServiceMaster’s common stock fell $1.42, or 3.5%, to close at $39.15 on November 5, 2019. ServiceMaster’s shares continued to decline by $3.41, or 9%, closing at $35.74 on November 6, 2019.
The complaint alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (a) ServiceMaster had failed to properly inspect and treat for Formosan activity; (b) as a result, ServiceMaster was and continued to experience a material adverse trend of costly litigation from injured customers which was not disclosed to investors; (c) in an unsuccessful attempt to mitigate this trend, the defendants had been taking remedial measures since at least 2018, including drastically raising prices for termite treatments in Mobile, Alabama to deter contract renewals; and (d) as a result of the foregoing, ServiceMaster’s financial results were reasonably likely to be impacted, and would continue to impact ServiceMaster into 2020.
If you are a member of the class described above, you may no later than June 9, 2020 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Returning the attached form or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-844-887-9500 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-844-887-9500 (toll free) or 1-610-667-7706
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