FedEx Corporation

In July 2016, the Company acquired TNT Express N.V., a logistics company, for $4.8 billion. On March 31, 2017, the Company announced that by fiscal 2020, the TNT integration would result in a $1.2 billion to $1.5 billion operating income improvement above its fiscal 2017 level (the “TNT Income Improvement Target”).

On December 18, 2018, the Company disclosed an earnings miss for second quarter 2018 due to negative shift in TNT’s product mix to lower margin freight business after a cyberattack on TNT’s operations in June 2017. The Company also lowered its fiscal 2019 guidance and stated that it could no longer achieve the TNT Income Improvement Target by fiscal 2020.

On this news, the Company’s shares fell $22.50 per share, or more than 12%, to close at $162.51 per share on December 19, 2018, thereby injuring investors.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) TNT’s overall package volume growth was slowing as TNT’s large customers permanently took their business to competitors after the Cyberattack; (2) as a result of the customer attrition, TNT was experiencing an increased shift in product mix from higher-margin parcel services to lower-margin freight services; (3) the anticipated costs and timeframe to integrate and restore the TNT network were significantly larger and longer than disclosed; (4) FedEx was not on track to achieve the TNT Income Improvement Target; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.