The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired eHealth, Inc. (“eHealth” or the “Company”) (NASDAQ: EHTH) securities during the period from March 19, 2018 through April 7, 2020 (the “Class Period”). Investors have until June 8, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The lawsuit alleges that the eHealth failed to disclose: (i) the Company’s highly aggressive accounting and modeling assumptions; (ii) the Company’s skyrocketing rate of member churn, resulting from eHealth’s pursuit of low quality, lossmaking growth; and (iii) the Company’s reliance on direct response television advertising, which attracts an unprofitable, high churn enrollee.
On April 8, 2020, Muddy Waters Research published a report alleging, among other things, that eHealth misled investors regarding member churn and revenue recognition. The report stated that the Company’s “member churn . . . skyrocketed” and “that EHTH is pursuing low quality, lossmaking growth while its LTVs are based on lower churn, pre-growth cohorts.”
On this news, eHealth shares fell $12.82, or 11%, to close at $116.02 per share on April 8, 2020.
If you acquired eHealth securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.