Why Did Eargo Shares Dropped To An All-Time Low?

Eargo Inc EAR stock has plunged to an all-time low since the Company started trading in October 2020.
The Company was informed that it is the target of a criminal investigation by the U.S. Department of Justice.
The investigation is related to insurance reimbursement claims submitted by the Company on behalf of its customers covered by federal employee health plans. Eargo says that it is cooperating with the investigation.
In addition, the Company intends to work with the government to validate the process to support any future claims that the Company may submit for reimbursement.
Hence, Eargo is withdrawing its financial guidance for the fiscal year ending December 31, 2021.
Related Content: Eargo Stock Plunges After Mixed Q2 Earnings.
Analyst Reaction: Wells Fargo has downgraded Eargo to Equal-Weight, with a price target of $10.
JP Morgan too downgraded the Company to Underweight, with a price target of $11.
Price Action: EAR stock is down 57.50% at $9.22 during the premarket session on the last check Thursday.