Resideo Technologies, Inc.
The Resideo class action lawsuit charges Resideo and certain of its officers with violations of the Securities Exchange Act of 1934. Resideo purports to be a global provider of products, software, solutions, and technologies that help homeowners stay connected and in control of their comfort, security, and energy use. The Company also provides home heating, ventilation and air conditioning controls and security solutions and is a distributor of security and low-voltage electronic products. The Company was formed through a spin-off from Honeywell International Inc. on October 29, 2018. That same day, Resideo stock began trading on the NYSE under the ticker symbol "REZI," opening at $28.00 per share. The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Resideo's business and prospects. Specifically, defendants failed to disclose that the negative operational effects of the spin-off were more substantial and persistent than disclosed and had negatively affected the Company's product sales, supply chain, and gross margins, putting Resideo's fiscal 2019 financial forecasts at risk, and that, as a consequence, the Company's financial guidance lacked a reasonable basis and the Company was not on track to make its fiscal 2019 guidance as defendants had claimed. As a result of defendants' material misrepresentations and omissions, Resideo stock traded at artificially inflated prices of more than $26 per share during the Class Period. Then, on October 22, 2019, Resideo issued its preliminary financial results for the third quarter of 2019, announcing that it had missed revenue and earnings targets and was lowering its recently reaffirmed revenue outlook for fiscal 2019 by $80 million. Also on October 22, 2019, the Company announced that the Company's CFO would be leaving as of November 6, 2019. Following these disclosures, Resideo's stock price declined more than 40%, from a close of $15.23 per share on October 22, 2019 to a close of $9.50 per share on October 23, 2019.