NEW YORK, July 02, 2019 (GLOBE NEWSWIRE) -- Safirstein Metcalf LLP announces that a class action has been filed in the U.S. District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired FedEx Corporation (NYSE: FDX) securities between September 19, 2017 and December 18, 2018 (the “Class Period”).
If you purchased shares of FedEx during the Class Period and would like more information about the shareholder class action, please contact Safirstein Metcalf LLP at 1-800-221-0015, or email info@SafirsteinMetcalf.com.
If you wish to serve as a lead plaintiff, you must move the Court no later than August 26, 2019. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice or may choose to do nothing and remain an absent class member.
The complaint alleges that FedEx significantly expanded its international operations through its $4.8 billion acquisition of TNT Express N.V. (TNT), a Netherlands-based logistics company with operations concentrated in Europe.
On June 27, 2017, TNT’s operations were crippled by a cyberattack known as NotPetya, which involved the spread of a malware virus throughout TNT’s systems (the “Cyberattack”). The timing of the attack was particularly problematic for FedEx, as TNT’s systems were paralyzed during the critical period involving the integration of TNT with the Company’s legacy European operations.
Throughout the Class Period, Defendants continually assured investors about its recovery from the Cyberattack and that any negative impact from the attack was minimal. For example, Defendants told investors that TNT customer volumes were being restored to pre-attack levels and that “despite the cyberattack, the customers stuck with us.” Defendants also stated that TNT integration efforts were successfully progressing and continuously stated that FedEx was “on track” to achieve TNT synergy targets.
Notwithstanding these positive representations to the market, Defendants made false and misleading statements and/or failed to disclose that: (1) TNT’s overall package volume growth was slowing as TNT’s large customers permanently took their business to competitors after the Cyberattack; (2) as a result of the customer attrition, TNT was experiencing an increased shift in product mix from higher-margin parcel services to lower-margin freight services; (3) the anticipated costs and timeframe to integrate and restore the TNT network were significantly larger and longer than disclosed; (4) FedEx was not on track to achieve TNT synergy targets; and (5) as a result of these undisclosed negative trends and cost issues, FedEx’s positive statements about TNT’s recovery from the Cyberattack, integration into FedEx’s legacy operations, customer mix, customer service levels, profitability, and prospects lacked a reasonable basis.
The truth about TNT’s deteriorating business was revealed through a series of disclosures culminating on December 18, 2018. On that date, FedEx reported a large profit miss for its second fiscal quarter ended November 30, 2018. Defendants attributed the disappointing results to lower package volumes in Europe and a negative shift in TNT’s product mix to lower margin freight business following the Cyberattack—which had occurred well over a year ago. The Company also lowered its fiscal 2019 earnings guidance and announced its main TNT synergy target would no longer be achievable by fiscal year 2020. Following this news, FedEx stock dropped $22.50 per share, or 12.2 percent, to close at $162.51 per share on December 19, 2018.
About Safirstein Metcalf LLP
Safirstein Metcalf LLP focuses its practice on shareholder rights. The law firm also practices in the areas of antitrust and consumer protection. All of the Firm’s legal endeavors are rooted in its core mission: provide investor and consumer protection.
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