Tivity Health, Inc.

Period: 03/08/2019 to 02/19/2020
Lead Plaintiff Deadline: 04/27/2020


A securities class action has been filed against Tivity Health, Inc. (TVTY) on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Tivity securities between March 8, 2019 though February 19, 2020.  This case has been filed in the USDC – M.D.TN.

In December 2018, Tivity announced that it would acquire Nutrisystem, Inc. (“Nutrisystem”), a provider of weight management products and services (the “Nutrisystem Acquisition”).  On March 8, 2019, Tivity announced the completion of the Nutrisystem Acquisition for approximately $1.3 billion in cash and stock.

The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) following the Nutrisystem Acquisition, Tivity’s Nutrition segment faced significant operational challenges; (ii) the foregoing would foreseeably have a significant impact on Tivity’s revenues; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.

On February 19, 2020, Tivity issued a press release announcing the Company’s financial results for the fourth quarter and year ended December 31, 2019.  Tivity disclosed, inter alia, that its “Nutrition segment had a disappointing end to 2019,” which included “a non-cash impairment charge of $(377.1) million,” contributing to a net loss for the Company of $272.8 million in the fourth quarter.  Concurrently, Tivity announced the resignation of the Company’s Chief Executive Officer (“CEO”) Donato Tramuto, effective immediately.  Discussing the Company’s financial results on an earnings call, the Company’s interim CEO, Robert Greczyn, stated that “[a]dmittedly, the nutrition business has not worked out as well as planned since the completion of the [Nutrisystem Acquisition] in March 2019.

On this news, Tivity’s stock price fell $10.43 per share, or 45.49%, to close at $12.50 per share on February 20, 2020.