According to the law firm press release, Bermuda-based Seadrill is the world’s largest offshore drilling contractor, providing offshore drilling services to the oil and gas industry worldwide.
The complaint alleges that during the Class Period, defendants made false and misleading statements about the strength of the Company’s business and prospects. Additionally, Seadrill has historically paid a large dividend, which it raised twice in early 2014 resulting in the Company paying a $1 per share quarterly dividend during the last two quarters of 2014. During the Class Period, defendants maintained that due to the Company’s strong backlog and the strength of its balance sheet, despite any turbulence in the oil industry, the Company would not cut its $4 per share annual dividend. As a result of defendants’ Class Period statements, Seadrill ADRs traded at artificially inflated prices, reaching a high of over $38 per ADR in July 2014.
On November 26, 2014, before the markets opened, Seadrill reported disappointing third quarter 2014 financial results (for the period ended September 30, 2014), announcing that it had missed its profit targets. In addition, the Company disclosed that it was indefinitely suspending its dividend, citing the Company’s need to pay down its debt to strengthen its balance sheet. The Company also disclosed that its Board of Directors had authorized the repurchase of up to 10% of its outstanding shares. On this news, the price of Seadrill ADRs fell from $20.71 per ADR to $15.99 per ADR on extremely heavy trading volume, a 58% decline from the ADRs’ Class Period high.
On June 23, 2015, the Court issued an Order appointing lead plaintiffs and approving lead counsel. Lead plaintiffs filed a consolidated complaint on July 23.
On June 20, 2016, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to amend their Complaint within 21 days.