Riskified Ltd. Investor Alert: Contact Robbins LLP for Information About the Class Action Lawsuit Against Riskified Ltd. (RSKD)
SAN DIEGO, May 09, 2022 (GLOBE NEWSWIRE) — The Class: Shareholder rights law firm Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons and entities that purchased Riskified Ltd. (NYSE: RSKD) Class A ordinary shares in or traceable to the Company’s initial public offering (“IPO”), for violations of the Securities Act of 1933. Riskified is an eCommerce risk management platform that uses machine learning to identify fraud.
If you would like more information about Riskified Ltd.’s misconduct, click here.
What is this Case About: Riskified Ltd. (RSKD) Issued Misleading Offering Documents in Support of its Initial Public Offering
According to the complaint, leading up to its IPO, Riskified claimed it was experiencing tremendous growth, stating that its revenue grew 55% in the first quarter of 2021 compared to the first quarter of 2020. Further, Riskified stated that its GMV grew 77%, gross profits grew 65%, and adjusted EBITDA went from a $3.1 million loss to a $296,000 loss from the first quarter of 2020 to the first quarter of 2021. Based on these facts, on July 28, 2021, the Company sold 20.125 million Class A ordinary shares at $21 per share, generating over $422 million in gross proceeds.
However, defendants failed to disclose certain known facts at the time of the IPO. Specifically, Riskified failed to disclose that as it expanded its user base, the quality of its machine learning platform deteriorated (rather than improve as represented in the Registration Statement) because of inaccuracies in the algorithms associated with onboarding new merchants and entering new locations and industries. Further, the Company failed to disclose that it had entered into industries with relatively high rates of fraud in which it had little experience, and this expansion negatively impacted the effectiveness of the Company’s machine learning platform. As a result, Riskified was suffering from materially higher chargebacks and cost of revenue and depressed gross profits and gross profit margins during the third fiscal quarter of 2021.
Following the IPO, Riskified experienced a decline in revenue growth, GMV growth, and gross profit margins, while experiencing an increase in cost of revenue due mainly to an increase in chargeback expenses. At the time of the filing of the complaint, Riskified Class A shares traded below $6 per share, more than 70% below the IPO price.
Next Steps: If you acquired shares of Riskified Ltd. (RSKD) pursuant to the Company’s July 2021 IPO, you have until July 1, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
Contact us to learn more:
Aaron Dumas
(800) 350-6003
[email protected]
Shareholder Information Form
About Robbins LLP: A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. To be notified if a class action against Riskified Ltd. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
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