Shareholder Investigation of BrightView
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Complaint Alleges that BrightView Holdings, Inc. (BV) Misled Shareholders
According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1933 pursuant to the company’s July 2018 initial public offering (“IPO”), BrightView Holdings, Inc. (BV) offered its stock at $22.00 per share and generated over $501.2 million in proceeds based on offering documents that failed to disclose that a material portion of BrightView’s contracts were underperforming or represented undesirable costs to the company and that the company’s exit strategy to end its non-profitable contracts would negatively impact future revenue.
Just a month after the IPO, BrightView reported negative financial results and disclosed for the first time that its Maintenance Services revenue was negatively impacted by its Managed Exit strategy. On November 27, 2018, BrightView disclosed that its Managed Exit strategy would result in a decline in revenue of $10 million over the course of fiscal year 2019. Then, on February 7, 2019, on a conference call with investors, the company revealed that underperforming contracts accounted for a $23.1 million drop in revenue for full year 2018, and it expected a loss in revenue of over $25 million for 2019. BrightView’s disclosures have caused the stock to steadily decline, and it now trades at around $16.00 per share.