Globe Newswire 11-Jan-2019 6:51 PM
NEW YORK, Jan. 11, 2019 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against, XPO Logistics, Inc. ("XPO" or the "Company") (NYSE:XPO) and certain of its officers. The class action, filed in United States District Court, District of Connecticut, and indexed under 18-cv-02062, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise, acquired XPO securities between February 26, 2014, and December 12, 2018, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased XPO securities between February 26, 2014, and December 12, 2018, both dates inclusive, you have until February 12, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
XPO provides transportation and logistics services in the United States, North America, France, the United Kingdom, Spain, Europe, Asia, and internationally, through its Transportation and Logistics segments. The Company offers its services to customers in various industries, such as retail, e-commerce, food and beverage, manufacturing, technology and telecommunications, aerospace and defense, life sciences, healthcare, medical equipment, and agriculture.
XPO was formerly known as Express-1 Expedited Solutions, Inc. ("Express-1"). On September 2, 2011, Defendant Bradley S. Jacobs ("Jacobs"), through an equity investment led by Jacobs Private Equity, LLC, acquired a 71% ownership interest in Express-1. Jacobs assumed the roles of Chairman of the Board of Directors and Chief Executive Officer ("CEO") and renamed the Company "XPO Logistics, Inc." XPO has completed seventeen acquisitions since Jacobs took control of the Company, deploying $6.1 billion of capital.
Prior to acquiring XPO, Jacobs had leadership roles in several other companies, having, inter alia, founded United Waste Systems, Inc. ("UWS") in 1989 and co-founded United Rentals, Inc. ("URI") in 1997, which eventually collapsed after an accounting scandal under Jacobs' leadership.
Jacobs's tenure at XPO has been characterized by aggressive mergers and acquisitions ("M&A") strategy. After Jacobs took control of the Company, Fortune Magazine noted that XPO "has grown from $177 million in sales in 2011 to $17 billion today, thanks largely to an incredible run of acquisitions." On August 2, 2017, Jacobs announced plans to earmark up to $8 billion for additional acquisitions.
The complaint 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) XPO's highly touted aggressive M&A strategy had yielded only minimal returns to the Company; (ii) XPO was utilizing improper accounting practices to mask its true financial condition, including, inter alia, under-reporting of bad debts and aggressive amortization assumptions; and (iii) as a result, the Company's public statements were materially false and misleading at all relevant times.
On December 12, 2018, Spruce Point Capital Management ("Spruce Point") published a report regarding XPO, entitled "Trucking Ridiculous; End of the Road". The Spruce Point report asserted that a "forensic investigation" into XPO had revealed, "financial irregularities that conveniently cover [the Company's] growing financial strain and inability to complete additional acquisitions despite repeated promises." Spruce Point reported that it had uncovered, among other issues, "concrete evidence to suggest dubious tax accounting, under-reporting of bad debts, phantom income through unaccountable M&A earn-out liabilities, and aggressive amortization assumptions: all designed to portray glowing ‘Non-GAAP" results." The Spruce Point report further stated that "XPO insiders have aggressively reduced their ownership interest in the Company since coming public, and recently enacted a new compensation structure tied to ‘Adjusted Cash Flow Per Share'—defined in such a non-standard way that it is practically meaningless." Spruce Point also reported that "[i]n our opinion, XPO has used a nearly identical playbook from [URI] leading up to its SEC investigation, executive felony convictions, and share price collapse."
Following publication of the Spruce Point report, XPO's stock price plunged $15.77 per share, or 26.17%, to close at $44.50 on December 13, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 9980
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