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Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against ServiceMaster, iAnthus, iQIYI, and GSX Techedu and Encourages Investors to Contact the Firm

NEW YORK, April 29, 2020 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of ServiceMaster Global Holdings, Inc. (SERV), iAnthus Capital Holdings, Inc. (Other OTC: ITHUF), iQIYI, Inc. (IQ), and GSX Techedu, Inc. (GSX). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.

ServiceMaster Global Holdings, Inc. (SERV)

Class Period: February 26, 2019 to November 4, 2019

Lead Plaintiff Deadline: June 9, 2020

On October 22, 2019, ServiceMaster announced disappointing preliminary financial results for the third quarter of 2019. The company stated that it missed revenue and earnings estimates and issued downward adjusted EBITDA guidance. The press release attributed the disappointing results to “termite damage claims arising primarily from Formosan termite activity,” primarily in Mobile, Alabama. The Company further stated that this had been a known issue, having taken mitigating measures “starting in 2018.” Finally, the Company announced the sudden departure of Matthew J. Stevenson in his role as President of Terminix Residential.

On this news the price of ServiceMaster common stock fell $11.44 per share or 20%, closing at $44.70 per share on October 22, 2019.

Then, on November 5, 2019, ServiceMaster released its third quarter 2019 financial results. In this press release discussing the “challenging quarter,” the Company revealed that it had been impacted by certain “legacy risks,” including “termite damage claims.” That same day, defendants held an earnings call with analysts and investors to discuss ServiceMaster’s third quarter 2019 financial results. On the call, defendants informed the market that the increase in termite litigation—which had occurred “[i]n the past few years”—had impacted termite revenue and these issues would continue throughout 2020.

On this news, the price of ServiceMaster shares fell $1.42 per share, or 3.5%, to close at $39.15 per share on November 5, 2019. As the market continued to digest the disappointing news, ServiceMaster shares further declined by $3.41, or 9%, to close at $35.74 per share on November 6, 2019.

All told, following the November 5, 2019 disclosure, ServiceMaster stock suffered a total decline of $4.83 per share from its November 4, 2019 closing price.

The complaint, filed on April 10, 2020, alleges that during the Class Period defendants repeatedly assured the market that ServiceMaster was successfully executing upon initiatives to improve the performance in the Terminix segment. In addition, defendants stated that Terminix would reach a positive “inflection point” and was “definitely the driver” for positive trends expected in the second half of 2019. Unbeknownst to investors, however, in the past several years the Terminix segment had experienced an adverse trend of costly termite litigation, primarily related to Formosan termite activity. This negative trend, which would ultimately impact ServiceMaster’s current and future financial results, was known to defendants throughout the Class Period, as by their own later admission they had been taking mitigating measures since 2018.

For more information on the ServiceMaster class action go to: https://bespc.com/SERV

iAnthus Capital Holdings, Inc. (Other OTC: ITHUF)

Class Period: May 14, 2018 to April 6, 2020

Lead Plaintiff Deadline: June 15, 2020

In May of 2018, iAnthus entered into the $50 million 2018 Debenture Agreement with Gotham Green Partners (“GGP”). Among other things, that agreement provided for the withholding and escrow of $5,722,222.22 from the 2018 Debenture proceeds to pay one year’s interest on the 2018 Debentures in the event of iAnthus’ inability to make its interest payments under the agreement.

Then, on September 30, 2019, iAnthus and GGP entered into the Amended Debenture Agreement, which provided an additional $20 million to the Company. The Amended Debenture Agreement included the provision from the 2018 Debenture Agreement that provided for the withholding and escrow of $5,722,222.22 to pay one year’s interest under the Amended Debenture Agreement in the event that iAnthus was unable to make the required interest payments.

Although iAnthus never disclosed that the $5.72 million in escrowed funds was not available to fund iAnthus’ interest payments, on April 6, 2020, iAnthus announced that it had defaulted on $4.4 million in interest payments to GGP under the Amended Debenture Agreement on March 31, 2020.

On this news, shares of iAnthus fell over 61%, closing at $0.179 per share on April 6, 2020.

The complaint, filed on April 15, 2020, alleges that throughout the Class Period defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s ability to pay its interest obligations under various debenture agreements. As a result of defendants’ alleged false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.

For more information on the iAnthus class action go to: https://bespc.com/ITHUF

iQIYI, Inc. (IQ)

Class Period: March 29, 2018 to April 7, 2020

Lead Plaintiff Deadline: June 15, 2020

On April 7, 2020, Wolfpack Research released a report detailing, among other things, how iQIYI had misled investors and failed to disclose pertinent information generally and in its March 2018 initial public offering Registration Statement, including: (i) iQIYI overstating its user numbers; (ii) iQIYI inflating its revenues; (iii) iQIYI inflating expenses and prices of assets to conceal its revenue inflation; and (iv) iQIYI issuing misleading financial reporting creating the appearance of a cash generative company.

On this news, iQIYI’s share price fell $0.99 per share over the rest of the trading day and the next full trading day, or 5.6%, to close at $16.51 per share on April 8, 2020.

The complaint, filed on April 16, 2020, alleges that throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) iQIYI inflated its revenue figures; (2) iQIYI inflated its user numbers; (3) iQIYI inflated its expenses to cover up other fraud; and (4) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. According to the suit, these true details were disclosed by a market research firm.

For more information on the iQIYI class action go to: https://bespc.com/IQ

GSX Techedu, Inc. (GSX)

Class Period: June 6, 2019 to April 13, 2020

Lead Plaintiff Deadline: June 16, 2020

On February 25, 2020, Grizzly Research LLC (“Grizzly”) published a report highlighting multiple alleged issues with GSX’s business and financial operations (the “Grizzly Report”).  Specifically, the Grizzly Report alleged, among other issues, that the Company “has been drastically overstating its profitability in its US public filings, especially for 2018”; Grizzly “found multiple strong indications of past and current order ‘brushing,’” which are “essentially fake student enrollments to boost student count”; “many of GSX’s reported students do not actually exist”; and “[w]hile [GSX] touts its high-quality teacher recruitment mechanism, [Grizzly] found a sign-up website that was not functional, multiple allegations of GSX hiring teachers right out of college with no prior experience, and fabricated teachers profiles.”

Following publication of the Grizzly Report, GSX’s share price fell $1.33 per share, or 2.93%, to close at $44.09 per share on February 25, 2020.

Then, on April 14, 2020, Citron Research (“Citron”) published a report highlighting additional alleged issues with GSX’s business and financial operations (the “Citron Report”), including, among other issues, that the Company’s “2019 revenue was overstated by 70%,” that “sales revenues are largely exaggerated,” and that the Company’s “filings are riddled with suspicious transactions.”

Following the publication of the Citron Report, GSX’s share price fell $0.20 per share, or 0.64%, to close at $31.20 per share on April 14, 2020.

The complaint, filed on April 17, 2020, alleges that throughout the Class Period defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies.  Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) GSX overstated its profitability, revenue, student enrollment figures, teacher qualifications, and teacher selection process; (ii) the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Company’s financial results; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.

For more information on the GSX class action go to: https://bespc.com/gsx

About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. 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.
Melissa Fortunato, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com