NEW YORK, Nov. 12 2019 /PRNewswire/ -- Prominent investor rights law firm Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") today filed a securities fraud class action lawsuit against Resideo Technologies, Inc. ("Resideo" or the "Company") (NYSE: REZI) on behalf of investors who purchased Resideo common stock between October 10, 2018 and October 22, 2019, inclusive (the "Class Period"). The case, captioned Hollywood Firefighters' Pension Fund v. Resideo Technologies, Inc., No. 19-cv-02889, is pending in the U.S. District Court for the District of Minnesota.
The complaint filed by BLB&G on behalf of Resideo investors alleges that the Company and certain of its senior executives (collectively, "Defendants") violated federal securities laws, and is based on an extensive proprietary investigation and a careful evaluation of the merits of this case. A copy of the complaint is available on BLB&G's website by clicking here. Investors who purchased Resideo common stock during the Class Period may, no later than January 7, 2020, seek to be appointed Lead Plaintiff for the Class.
Resideo's Alleged Fraud
Resideo is a manufacturer of home automation products, including, among other things, smart thermostats and security cameras. The Company was formed through a spin-off from parent Honeywell International, Inc. ("Honeywell"). Prior to the spin-off, the business that was to become Resideo comprised Honeywell's Home product portfolio and ADI Global Distribution business.
Based on BLB&G's investigation, the action alleges that, throughout the Class Period, Resideo made multiple misleading public statements, including telling investors that: Resideo would be a market leader; there was strong demand for the Company's "connected" home products; the Company would remain competitive in the sale of nonconnected products; and Resideo was actively resolving supply-chain problems.
In reality, after the spinoff Resideo continued to compete directly with its former parent, Honeywell, in the sale of comfort products, including thermostats. Honeywell maintained an inventory of a key product line, and cannibalized Resideo's business. Resideo focused on sales of newer model thermostats despite the popularity of the older model still being sold by Honeywell. In addition, Resideo's high-margin Residential Thermal Solutions ("RTS") business, which sells components to manufacturers of heating systems, faced supply chain issues that were driven by industry-wide declines. Despite those declines, Resideo misled investors about its RTS business generally and about the Company's management of its supply-chain in particular.
After the close of trading on October 22, 2019, Resideo released preliminary financial results for the third quarter, and surprised investors by announcing earnings that significantly missed estimates. The Company also materially reduced its earnings guidance for 2019. The drivers of these disappointing results were the lower sales of thermostats and the performance of the RTS business. The Company also announced the replacement of its Chief Financial Officer. In response to these disclosures, the price of Resideo stock declined precipitously, wiping out significant shareholder value.
If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than January 7, 2020. Any member of the proposed Class may move the Court to serve as Lead Plaintiff through counsel of their choice. Members may also choose to do nothing and remain part of the proposed Class.
If you have pertinent information concerning this matter or are a shareholder who has suffered a material loss on your Resideo investment, please contact BLB&G Partner Avi Josefson at (212) 554-1493 or [email protected].
BLB&G is widely recognized worldwide as a leading law firm advising institutional investors on issues related to corporate governance, shareholder rights, and securities litigation. Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity and pioneered the use of the litigation process to achieve precedent-setting governance reforms. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering over $33 billion on behalf of defrauded investors. More information about the firm can be found online at www.blbglaw.com.
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SOURCE Bernstein Litowitz Berger & Grossmann LLP