PHILADELPHIA, May 27, 2020 /PRNewswire/ -- Berger Montague is continuing to investigate securities fraud claims against ServiceMaster Global Holdings, Inc. ("ServiceMaster" or the "Company") on behalf of all purchasers of ServiceMaster common stock (NYSE: SERV) between February 26, 2019 and November 4, 2019 (the "Class Period"). The Company has recently confirmed that Litigated Claims arising from the Formosan termite have increased since the beginning of 2017 and, according to the 2Q 2020 earnings call with investors on May 8, 2020, the Company recently undertook measures to offset the impacts of recent trends, reducing costs by approximately $45 million, including "right-sizing" – i.e., laying off – "about 450 Terminix pest control technicians and sales professionals." Investors are reminded that the deadline to seek lead plaintiff appointment is June 9, 2020.
If you purchased ServiceMaster shares, have information, would like to discuss this investigation, or have any questions concerning your rights or interests, please contact our attorneys Michael Dell'Angelo, Esq. at (215) 875-3080 or Andrew Abramowitz, Esq. at (215) 875-3015, or visit www.bergermontague.com/second-servicemaster-update.
According to the lawsuit, throughout the Class Period, ServiceMaster and its senior management represented that the Company was successfully executing upon initiatives to improve the performance of its Terminix segment. Unbeknownst to investors, however, the Terminix segment had experienced an adverse trend of costly termite litigation, primarily related to Formosan activity, in recent years.
Investors began to learn the truth when, on October 22, 2019, ServiceMaster announced disappointing preliminary financial results for the third quarter 2019, and blamed the poor performance on "termite damage claims arising primarily from Formosan termite activity" primarily in Mobile, Alabama. At that time, the Company revealed that this was a known issue for which mitigation efforts had commenced "starting in 2018." The Company also announced that the President of Terminix Residential had abruptly departed.
On this news, shares of ServiceMaster fell 20%, or $11.44 per share.
On November 5, 2019, ServiceMaster released its final Q3 2019 financial results, informing investors that: (1) the increase in termite claims litigation that occurred "[i]n the past few years" impacted termite revenue by 7-8% and would continue throughout 2020; and (2) contract price increases in Mobile were part of an effort to "mitigate" termite damage claims (essentially by discouraging contract renewals). Shares fell further on this news, dropping $1.42 (3.5%) on November 5, and another $3.41 (9%) on November 6, as the market absorbed the news.
If you purchased ServiceMaster common stock during the Class Period, you may seek Court appointment as lead plaintiff to represent other injured investors in a class action. The lead plaintiff appointment deadline is June 9, 2020. You do not need to be a lead plaintiff to share in any potential Class recovery.
Whistleblowers: Persons with non-public information regarding ServiceMaster Global Holdings, Inc. should consider their options to help Berger Montague's investigation or take advantage of the SEC Whistleblower program. Under this program, whistleblowers who provide original information may receive rewards totaling up to thirty percent (30%) of successful recoveries obtained by the SEC. For more information, contact us.
Berger Montague, with offices in Philadelphia, Minneapolis, Washington, D.C., and San Diego, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for five decades and serves as lead counsel in courts throughout the United States.
Michael Dell'Angelo, Managing Shareholder Berger Montague (215) 875-3080 [email protected]