PHILADELPHIA, Jan. 4, 2019 /PRNewswire/ -- Berger Montague announced today that GreenSky (NASDAQ: GSKY), certain of its officers and directors and the underwriters in GreenSky's initial public offering ("IPO") have been accused of federal securities law violations in a class action filed in the U.S. District Court for the Southern District of New York. The lawsuit was filed on behalf of individuals or entities who purchased GreenSky's Class A common stock pursuant or traceable to GreenSky's Registration Statement and Prospectus in connection with the company's IPO, which closed on May 29, 2018. Any purchaser who bought stock from the original offering up until November 5, 2018 may have a viable claim.
The deadline for GreenSky class members to file a lead plaintiff motion with the Court is January 28, 2019. Any member of the proposed class may move the Court on or before January 28, 2019 to serve as lead plaintiff through counsel of their choice or may choose to do nothing and remain an absent class member.
If you wish to discuss this action, learn more about serving as a lead plaintiff or have any questions concerning this notice or your rights, please contact Barbara A. Podell at 215-875-4690, Michael C. Dell'Angelo at 215-875-3080, or Phyllis M. Parker at 215-875-4647 of Berger Montague.
GreenSky, based in Atlanta, GA, describes itself as a "leading technology company that powers commerce at the point of sale" and that its "proprietary technology platform facilitates merchant sales while reducing the friction and improving the economics associated with a consumer making a purchase and a bank extending financing for that purchase."
The complaint alleges that GreenSky's Registration Statement and Prospectus ("Offering Documents"), issued in connection with the company's IPO, which closed on May 29, 2018, contained false and misleading statements and omissions about the impact GreenSky's already-begun shift in its merchant loan mix would have on the Company's main source of revenue: transaction fees. As alleged, the Offering Documents failed to disclose that revenues would be reduced because of its expansion into the low transaction fee elective healthcare market â such as cosmetic dentistry, vision correction, and hearing aid devices â and away from GreenSky's historic solar panel business which paid higher than average transaction fees.
The complaint further alleges that on November 6, 2018, GreenSky announced its 2018 Q3 financial results, reporting substantially reduced 2018 outlook for Adjusted EBITDA. On the earnings call, GreenSky's CEO reported that the reduction in transaction fees compared to the same quarter the previous year was "entirely driven by our solar mix going from a high of almost 20% of our business in 2017 to 4% of our business."
At the close of trading on November 6, GreenSky's stock plunged to a closing price of $9.28 per share from the previous day's close of $14.66, a one-day loss of more than $1 billion in market capitalization. This was over 60% below the stock's price of $23 per share at the company's IPO, less than 6 months earlier. As of the close of trading on January 3, 2019, the stock traded at $9.55.
If you purchased GreenSky Class A common stock pursuant or traceable to the company's IPO and wish to discuss this case and/or your potential losses, please contact Barbara A. Podell at 215-875-4690, Michael C. Dell'Angelo at 215-875-3080, or Phyllis M. Parker at 215-875-4647.
Berger Montague is a national law firm headquartered in Philadelphia with additional offices in Minneapolis and Washington, D.C. The firm litigates complex civil cases and class actions in federal and state courts throughout the United States. Berger Montague has played lead roles in major cases for 49 years, resulting in recoveries of over $30 billion for its clients.
Barbara A. Podell
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SOURCE Berger Montague