NEW YORK, June 26, 2019 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C. 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 all persons or entities who purchased or otherwise acquired FedEx Corporation (NYSE: FDX) securities between September 19, 2017 and November 8, 2018 (the “Class Period”). Investors have until August 26, 2019 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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The complaint filed on June 26, 2019 alleges that FedEx significantly expanded its international operations through its $4.8 billion acquisition of TNT Express N.V. (TNT), a Netherlands-based logistics company with operations concentrated in Europe. On June 27, 2017, TNTs operations were crippled by a cyberattack known as NotPetya, which involved the spread of a malware virus throughout TNTs systems (the Cyberattack). The timing of the attack was particularly problematic for FedEx, as TNTs systems were paralyzed during the critical period involving the integration of TNT with the Company’s legacy European operations. Throughout the Class Period, Defendants continually assured investors about its recovery from the Cyberattack and that any negative impact from the attack was minimal. For example, Defendants told investors that TNT customer volumes were being restored to pre-attack levels and that despite the cyberattack, the customers stuck with us. Defendants also stated that TNT integration efforts were successfully progressing and continuously stated that FedEx was on track to achieve TNT synergy targets. Notwithstanding these positive representations to the market, Defendants made false and misleading statements and/or failed to disclose that: (1) TNTs overall package volume growth was slowing as TNTs large customers permanently took their business to competitors after the Cyberattack; (2) as a result of the customer attrition, TNT was experiencing an increased shift in product mix from higher-margin parcel services to lower-margin freight services; (3) the anticipated costs and timeframe to integrate and restore the TNT network were significantly larger and longer than disclosed; (4) FedEx was not on track to achieve TNT synergy targets; and (5) as a result of these undisclosed negative trends and cost issues, FedEx positive statements about TNTs recovery from the Cyberattack, integration into FedExs legacy operations, customer mix, customer service levels, profitability, and prospects lacked a reasonable basis. The truth about TNTs deteriorating business was revealed through a series of disclosures culminating on December 18, 2018. On that date, FedEx reported a large profit miss for its second fiscal quarter ended November 30, 2018. Defendants attributed the disappointing results to lower package volumes in Europe and a negative shift in TNTs product mix to lower margin freight business following the Cyber attack which had occurred well over a year ago. The Company also lowered its fiscal 2019 earnings guidance and announced its main TNT synergy target would no longer be achievable by fiscal year 2020. On this news, FedEx stock dropped $22.50 per share, or 12.2 percent, to close at $162.51 per share on December 19, 2018.
If you purchased FedEx securities during the Class Period or continue to hold shares purchased before the Class Period, 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 or Melissa Fortunato by email at investigations@bespc.com, or telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
Bragar Eagel & Squire, P.C. is a New York-based law firm concentrating in commercial and securities litigation. For additional information concerning the FedEx lawsuit, please go to https://bespc.com/fdx. For additional information about Bragar Eagel & Squire, P.C. please go to www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contacts
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com