A lawsuit was filed on behalf of investors in Riskified Ltd. (NYSE:RSKD) shares over alleged securities laws violations.
San Diego, CA -- (SBWIRE) -- 05/18/2022 -- An investor, who purchased shares of Riskified Ltd. (NYSE: RSKD), filed a lawsuit in the U.S. over alleged violations of Federal Securities Laws by Riskified Ltd. in connection with Riskified's July 2021 initial public offering.
Investors who purchased shares of Riskified Ltd. (NYSE: RSKD) have certain options and for certain investors are short and strict deadlines running. Deadline: July 1, 2022. NYSE: RSKD investors should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 - 1554.
Israel based Riskified Ltd. operates an e-commerce risk management platform that allows online merchants to create trusted relationships with their consumers in the United States, Europe, the Middle East, Africa, and internationally.
On July 1, 2021, Riskified Ltd. filed with the U.S. Securities and Exchange Commission ("SEC") a registration statement on Form F-1 for the initial public offering ("IPO"), which, after several amendments, was declared effective on July 28, 2021 (the "Registration Statement").
The Registration Statement was used to sell to the investing public 20.125 million Riskified Ltd. (NYSE: RSKD) Class A ordinary shares at $21 per share, generating over $422 million in gross proceeds.
On September 9, 2021, during a conference call to discuss Riskified Ltd's financial results for the second quarter ended June 30, 2021, Riskified Ltd's CFO,Aglika Dotcheva, stated that Riskified Ltd. tended "to experience higher chargebacks when we enter a new industry."
Then, on November 16, 2021, Riskified Ltd. announced its third quarter ended September 30, 2021 results, revealing that Riskified's revenue growth had declined to 26% year-over-year, Riskified's Gross Merchandise Value ("GMV") growth had declined to 28% year-over-year, Riskified's gross profits had increased only 10% year-over-year, Riskified's gross profit margins had plummeted to just 46% during the quarter, and Riskified's gross profit fell sequentially to $24.3 million. Further, Riskified's cost of revenue had jumped to $28.3 million in the third quarter of 2021, primarily as a result of a sharp increase in chargeback expenses. During the earnings call, defendant Dotcheva blamed Riskified's growing merchant base as a primary cause of increased chargebacks.
On February 23, 2022, Riskified Ltd. announced its fourth quarter and year ended December 31, 2021 results, disclosing that Riskified's revenue growth and GMV growth had continued to decelerate, Riskified's gross profit growth remained muted, and Riskified's cost of revenue had continued to climb. Riskified also revealed that it expected to generate only between $254 million and $257 million in 2022 revenues (which would represent only 11.5% year-over-year growth) and an adjusted 2022 earnings before interest, taxes, depreciation, and amortization of between negative $69 million and $66 million (which would more than triple the losses suffered by Riskified in 2021), indicating that the adverse business trends being suffered by Riskified were in fact accelerating. During the earnings call the same day, defendant Dotcheva stated that the year-over-year decline in gross profit margin experienced "was driven primarily by [Riskified's] expansion into new industries and regions, increase of the tickets in travel industry as a percentage of total billings as well as the onboarding of new merchants.
Shares of Riskified Ltd. (NYSE: RSKD) declined to as low as $4.21 per share on May 9, 2022.
The plaintiff alleges on behalf of purchasers of Riskified Ltd. (NYSE: RSKD) common shares, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that the IPO's Registration Statement made inaccurate statements of material fact because they failed to disclose the following adverse facts that existed at the time of the IPO: (i) as Riskified Ltd. expanded its user base, the quality of Riskified's machine learning platform had deteriorated (rather than improved as represented in the Registration Statement), because of, among other things, inaccuracies in the algorithms associated with onboarding new merchants and entering new geographies and industries; (ii) Riskified Ltd had expanded its customer base into industries with relatively high rates of fraud – including partnerships with cryptocurrency and remittance business – in which Riskified had limited experience and that this expansion has negatively impacted the effectiveness of Riskified's machine learning platform; (iii) as a result, Riskified Ltd was suffering from materially higher chargebacks and cost of revenue and depressed gross profits and gross profit margins during its third fiscal quarter of 2021; and (iv) thus, the Registration Statement's representations regarding Riskified's historical financial and operational metrics and purported market opportunities did not accurately reflect the actual business, operations, and financial results and trajectory of Riskified Ltd prior to and at the time of the IPO, and were materially false and misleading, and lacked a factual basis.
Those who purchased shares of Riskified Ltd. (NYSE: RSKD) have certain options and should contact the Shareholders Foundation.
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About The Shareholders Foundation
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.