SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Root Inc., of Class Action Lawsuit and Upcoming Deadline - ROOT

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NEW YORK, April 19, 2021 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Root Inc. ("Root" or the "Company") (NASDAQ: ROOT) and certain of its officers. The class action, filed in the United States District Court for the Southern District of Ohio, Eastern Division, and docketed under 21-cv-01197, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired: (a) Root securities between October 28, 2020 and March 8, 2021, both dates inclusive (the "Class Period"); and/or (b) Root Class A common stock pursuant and/or traceable to the Offering Documents (defined below) issued in connection with the Company's initial public offering conducted on or about October 28, 2020 (the "IPO" or "Offering"). Plaintiff pursues claims against the Defendants under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").

If you are a shareholder who purchased Root securities during the Class Period and/or pursuant and/or traceable to the IPO, you have until May 18, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.

[Click here for information about joining the class action]

Root provides insurance products and services in the U.S. The Company has historically focused on auto insurance and operates a direct-to-consumer model that serves customers primarily through mobile applications, as well as through the Company's website.

Leading up to and following the IPO, Root described itself as an innovator in the personal insurance space with a new data- and technology-driven business model that was ready to disrupt traditional insurance markets and capture disproportionate market share, in part because of the Company's telematics-driven approach to insurance—i.e., the collection and transmission of vehicle-use data through devices.

On October 5, 2020, Root filed a registration statement on Form S-1 with the SEC in connection with the IPO, which, after several amendments, was declared effective on October 27, 2020 (the "Registration Statement"). On October 28, 2020, Root 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. On October 29, 2020, Root filed a prospectus on Form 424B4 with the SEC in connection with the IPO, which incorporated and formed part of the Registration Statement (the "Prospectus" and, together with the Registration Statement, the "Offering Documents").

The Offering Documents were negligently prepared and, as a result, 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. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) Root would foreseeably fail to generate positive cash flow for at least several years following the IPO; (ii) accordingly, the Company would foreseeably require significant cash infusions to meet its cash flow needs; (iii) notwithstanding the Defendants' touting of Root's purportedly unique, data-driven advantages, several of the Company's established industry peers in fact possessed significant competitive advantages over Root with respect to, inter alia, telematics data and data engagement; and (iv) as a result, the Offering Documents and Defendants' public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.

On March 9, 2021, Bank of America ("BofA") Securities analyst Joshua Shanker ("Shanker") initiated coverage of Root with an "Underperform" rating on the premise that the Company is unlikely to be cash flow positive until 2027, finding that Root "will require not insignificant cash infusions from the capital markets to bridge its cash flow needs." Shanker also noted that insurers Progressive, Allstate, and Berkshire Hathaway's Geico would continue to impede the Company's profitability, with Progressive and Allstate having a "sizable advantage over Root in terms of amount of [telematics] data as well as engagement with the data" used to price their auto insurance.

On this news, Root's stock price fell $0.18 per share, or 1.46%, to close at $12.17 per share on March 9, 2021, representing a total decline of 54.93% from the Offering price.

The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris 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, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm 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 numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com

CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980

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SOURCE Pomerantz LLP