NEW YORK, April 30, 2021 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased Leidos Holdings, Inc. (NYSE: LDOS) securities between May 4, 2020 and February 23, 2021, inclusive (the “Class Period”). Investors have until May 3, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Click here to participate in the action.
On February 16, 2021, Spruce Point Capital Management LLC (“Spruce Point”) published a research report, alleging, among other things that “Leidos is potentially covering up at least $100m of fictitious sales, mischaracterizing $355 - $367m of international revenue.” The report also alleged that the Company was “concealing numerous product defects from investors, notably faulty explosive detection systems at airports and borders.”
On this news, the Company’s share price fell $2.58, or 2.4%, to close at $105.22 per share on February 16, 2021.
On February 23, 2021, Leidos announced its fourth quarter and full year 2020 financial results in a press release. Therein, the Company reported $89 million revenue related to the SD&A businesses for the fourth quarter, meaning that after two full quarters, the acquisition generated only $163 million in sales (or $326 million annualized), falling well short of projected $500 million sales. The Company expected cash flow of $850 million, well below analyst estimates of $1.083 billion.
On this news, the Company’s stock price fell $10.29, or 9.91%, to close at $93.51 per share on February 23, 2021.
On February 24, 2021, Spruce Point highlighted that Leidos had “materially expanded” the risk disclosures in its annual report for the year ended December 31, 2020. Spruce Point tweeted: “We believe it is validating all the major points of our report.”
On this news, the Company’s stock price fell $3.13, or 3.3%, to close at $90.38 per share on February 24, 2021.
The complaint, filed on March 4, 2021, alleges that throughout the Class Period defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to disclose to investors: (1) that the purported benefits of the Company’s acquisition of L3Harris’ Security Detection & Automation businesses were significantly overstated; (2) that Leidos’ products suffered from numerous product defects, including faulty explosive detection systems at airports, ports, and borders; (3) that, as a result of the foregoing, the Company’s financial results were significantly overstated; and (4) that, as a result of the foregoing, defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased Leidos securities during the Class Period and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com