ServiceMaster Global Holdings, Inc.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired ServiceMaster Global Holdings, Inc. (“ServiceMaster” or the “Company”) (NYSE: SERV) securities during the period from February 26, 2019 through November 4, 2019 (the “Class Period”). Investors have until June 9, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The lawsuit alleges that ServiceMaster failed to disclose that: (i) ServiceMaster had failed to properly inspect and treat for Formosan termite activity; (ii) as a result thereof, the Company was and continued to experience a material adverse trend of costly litigation from injured customers which was not disclosed to investors; and (iii) in an unsuccessful attempt to mitigate this trend, Defendants had been taking remedial measures since at least 2018, including drastically raising prices for termite treatments in Mobile, Alabama to deter contract renewals.
On October 22, 2019, ServiceMaster announced disappointing preliminary financial results for the third quarter of 2019, having missed revenue and earnings estimates. The press release attributed the disappointing results to “termite damage claims arising primarily from Formosan termite activity,” primarily in Mobile, Alabama. ServiceMaster further stated that this had been a known issue, having taken mitigating measures since early 2018. On this news, the price of ServiceMaster common stock fell $11.44, or 20.4%, to close at $44.70 on October 22, 2019.
On November 5, 2019, ServiceMaster released its third quarter 2019 financial results. In this press release discussing the “challenging quarter,” the Company revealed that it had been impacted by certain “legacy risks,” including “termite damage claims.” On the earnings call the same day, it was revealed that the increase in termite litigation “[i]n the past few years” had impacted termite revenue by 7-8%, up from the historic impact of termite damage claims of 4-4.5%. On this news, the price of ServiceMaster common stock fell $1.42, or 3.5%, to close at $39.15 on November 5, 2019. The shares continued to decline by $3.41, or 9%, to close at $35.74 on November 6, 2019.
If you acquired ServiceMaster 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 email@example.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.