(NASDAQ GS: ROOT)
Rigrodsky Law, P.A. is investigating potential claims against the officers and directors of Root, Inc. ("Root" or the "Company") on behalf of stockholders. A class action complaint has been filed against Root. Root filed a registration statement and prospectus with the United States Securities and Exchange Commission (the "SEC") in connection with the Company's IPO (together, the "Offering Documents"). On October 28, 2020, the Company conducted the IPO, selling 26.8 million shares of the Company's Class A common stock to the public at $27.00 per share for total approximate proceeds of $724.43 million. The complaint alleges that Offering Documents were negligently prepared and contained untrue statements of material fact, or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. The Offering Documents portrayed the Company's purported $332 average customer acquisition cost as providing a competitive advantage for the Company over traditional insurers that the Company was competing with for new customers, and described the Company's planned national advertising campaign in connection with its expansion to all fifty states. Nowhere in the Offering Documents does it state that the Company's customer acquisition costs had already materially risen as of the IPO due to the Company's national expansion throughout the United States, or that the Company did not have a competitive advantage versus traditional insurers in terms of customer acquisition costs.