A shareholder class action complaint has been filed against Eargo, Inc. (“Eargo” or the “Company”) (NASDAQ: EAR) on behalf of investors who purchased shares of the Company’s common stock between February 25, 2021 and September 22, 2021, inclusive (the “Class Period”).
Eargo, is a manufacturer of rechargeable hearing aids. A major portion of the Company’s revenues depends on reimbursements from third-party payor insurance companies.
On August 12, 2021, the Company disclosed that claims submitted to its largest third-party payor had gone unpaid since March 31, 2021, and that those claims represented 80% of Eargo’s gross account receivables as of June 30, 2021. On this news, the price of Eargo common stock fell $8.00 per share, or 24.46%, from its closing price of $32.70 on August 12, 2021, to close at $24.70 per share on August 13, 2021, on elevated trading volume.
On September 22, 2021, after market close, the Company reported that it was “the target of a criminal investigation by the U.S. Department of Justice (the ‘DOJ’) related to insurance reimbursement claims the Company submitted on behalf of its customers covered by federal employee health plans.” As a consequence, Eargo withdrew its financial guidance for fiscal 2021. On this news, the price of Eargo common stock fell $14.81 per share, or 68.34%, from its closing price of $21.67 on September 21, 2021, to close at $6.86 on September 22, 2021, on extremely heavy trading volume.
IMPORTANT DEADLINE: Investors who purchased Eargo’s securities during the Class Period may, no later than December 6, 2021, seek to be appointed as a lead plaintiff representative in the action.
Eargo investors who suffered an investment loss in excess of $100,000 are encouraged to contact Kaskela Law LLC (D. Seamus Kaskela, Esq.) at (484) 258 – 1585, or by completing the information form on this page, for additional information about the opportunity to actively participate in the action as a lead plaintiff representative.