ADT, Inc. (ADT) Accused of Providing Misleading Financial Information in Its Offering Documents
According to the complaint, in January 2018, ADT, Inc. (ADT) held its IPO, issuing approximately 105 million shares of ADT stock and raising more than $1.4 billion in gross proceeds. ADT’s registration statement portrayed the company has having undergone a “transformation” and touted that the new management team had reduced customer acquisition costs and improved profitability, which had already led to improved financial results. In reality, ADT was experiencing dramatically worse financial results—the company suffered a net loss of over $300 million, a quarterly loss of $0.06 EPS, and increasing year-over-year losses of $0.35 diluted EPS for FY 2017—down 75% from 2016. In addition to providing misleading financial information, ADT failed to provide important metrics in order to prevent investor and market analysts from accurately appraising the state of ADT’s business. Since the truth about ADT’s financial condition became known, ADT shares currently trade below $9 per share—an over 37% decline from the offering price.
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