PHILADELPHIA, April 19, 2022 (GLOBE NEWSWIRE) -- Investor protection law firm Kaskela Law LLC is investigating eHealth, Inc. (NASDAQ: EHTH) (“eHealth” or the “Company”) on behalf of the Company’s long-term shareholders.
eHealth stockholders who purchased or acquired shares of the Company’s common stock prior to March 19, 2018 are encouraged to contact Kaskela Law LLC (Adrienne Bell, Esq.) at (484) 229 – 0750, or by email (abell@kaskelalaw.com) or online at https://kaskelalaw.com/cases/ehealth-inc/, for additional information about this investigation and their legal rights and options.
Recently a securities fraud complaint was filed against eHealth on behalf of investors who purchased shares of the Company’s common stock between March 19, 2018 and July 23, 2020. The complaint alleges that during that time period eHealth issued a series of false and misleading statements to investors.
According to the complaint, on April 7, 2020, research firm Muddy Waters Capital published a report alleging that eHealth had engaged in accounting misconduct. The report indicated, among other things, that eHealth’s “highly aggressive accounting masks [] a significantly unprofitable business,” “that the key driver of growth since 2018 has been EHTH’s reliance on Direct Response television advertising, which attracts an unprofitable, high churn enrollee,” “that EHTH’s persistence assumptions in its LTV model [under ASC 606] seem highly aggressive when compared to reality.” The Muddy Waters report also alleged that eHealth’s financial statements for 2019: (a) overstated revenue by $128 million; (b) overstated operating profit by $263 million; and (c) understated an operating loss of -$181 million.
Following the publication of the Muddy Waters report, shares of the company’s stock declined $13.70 per share, or 11%, to close on April 8, 2020 at $103.20 per share.
Then, on July 23, 2020, when eHealth announced its earnings results for the second quarter of fiscal 2020, the company’s stock price fell again as the information contained in its announcement confirmed substantive aspects of the “member churn” allegations previously asserted in the Muddy Waters report. Following this additional news, shares of the company’s stock declined $34.83 per share, or over 30%, to close July 24, 2020 at $79.17 per share.
The firm’s investigation seeks to determine whether the members of eHealth’s board of directors violated the securities laws or breached their fiduciary duties in connection with the above alleged misconduct.
Kaskela Law LLC represents investors in securities fraud, corporate governance, and merger & acquisition litigation. For additional information about the firm please visit
www.kaskelalaw.com. This notice may constitute attorney advertising in certain jurisdictions.
CONTACT:
D. Seamus Kaskela, Esq.
Adrienne Bell, Esq.
KASKELA LAW LLC
18 Campus Blvd., Suite 100
Newtown Square, PA 19073
(888) 715 – 1740
(484) 229 – 0750
www.kaskelalaw.com
