PR Newswire
NEW YORK, Nov. 28, 2023
NEW YORK, Nov. 28, 2023 /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of R1 RCM Inc. ("RCM" or the "Company") (NASDAQ: RCM). Such investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529, ext. 7980.
The investigation concerns whether RCM and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
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On October 16, 2023, Jehoshaphat Research ("Jehoshaphat") published a short report on RCM, asserting that "RCM's revenues and profits are grossly overstated by a variety of desperate accounting measures, and . . . horrific corporate governance has allowed this to happen." Among other issues, the Jehoshaphat report described "aggressive mark-to-model revenue recognition creating most of the revenue growth in the company today, creatively deflated expenses that inflate Adjusted EBITDA by approximately 55%, potentially systematic under-reserving for customer bad debts, hidden customer acquisition costs, chronically thin free cash flow, hidden capex, and sell-side estimates for incentive fee revenues that are too high, all occurring at a company with an irresponsibly high level of debt, especially considering its grossly inflated Adjusted EBITDA number." On this news, RCM's stock price fell $1.09 per share, or 8.26%, to close at $12.11 per share on October 16, 2023. Then, on November 13, 2023, RCM disclosed in a filing with the U.S. Securities and Exchange Commission that "i) the Company's audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021, included in the Company's Annual Report on Form 10-K filed with the SEC; (ii) the Company's unaudited consolidated financial statements as of and for each of the quarters within 2022 and 2021, included in the Company's Quarterly Reports on Form 10-Q filed with the SEC; and (iii) even though the errors do not materially impact the unaudited condensed consolidated financial statements for the quarters ended June 30, 2023 and March 31, 2023 included in the Company's Quarterly Reports on Form 10-Q filed with the SEC, such financial statements (collectively, the 'Non-Reliance Periods') should not be relied upon due to the errors described above and need to be restated. In addition to the restatement errors described above, the Company expects to correct certain items that were previously identified and concluded as immaterial, individually and in the aggregate, to the financial statements for the Non-Reliance Periods."
On this news, RCM's stock price fell $0.36 per share, or 3.49%, to close at $9.96 per share on November 13, 2023.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP
