Friday, November 22, 2024
Xerox Sued for Misleading Investors Amid Financial Decline
Xerox Sued for Misleading Investors Amid Financial Decline
Xerox Holdings Corporation is the target of a class-action lawsuit filed by Bragar Eagel & Squire, P.C., a prominent stockholder rights law firm. The lawsuit represents individuals and entities who purchased or acquired Xerox securities between January 25, 2024, and October 28, 2024.
The legal action centers on allegations that Xerox made misleading statements about its financial outlook despite ongoing underperformance. On April 23, before the market opened, Xerox reported a decline in revenue, profit, and equipment sales for the second quarter. While attributing the drop to its Reinvention initiative and projecting future benefits, the company faced a share price drop to $14.76 and unusually heavy trading volume.
The downturn persisted into the next quarter. On October 29, Xerox announced further declines in revenue and sales, alongside a net loss of $1.2 billion. The company blamed weaker-than-expected sales productivity and delays in launching two new products. John Bruno, Chief Operating Officer of Xerox, also added that the company overestimated the amount of old products it could sell through. The news caused the share price to plummet again, closing at $8.49 per share, accompanied by similarly heavy trading volume.
| Revenue | YoY Change | Net Profit | Equipment Sales | YoY Change | Share Price (per share) | Change | |
| Q2 (By April 23, before market opened) | $1.50 billion | -12.4% | -$113 million | $290 million | -25.8% | $14.76 | -10.11% |
| Q3 (By October 29, before market opened) | $1.53 billion | -7.5% | -$1.2 billion | $339 million | -12.2% | $8.49 | -17.41% |
The lawsuit alleges Xerox issued false and misleading statements to investors while withholding information about internal challenges, including disruptions within its salesforce and inefficiencies in handling outdated products. In its original announcement, Bragar Eagel & Squire, P.C. encourages other affected shareholders to come forward and seek lead plaintiff status in this lawsuit.
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- Xerox Releases Financial Results for Q1 2024
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