NEW YORK, May 05, 2022 (GLOBE NEWSWIRE) — Wolf Haldenstein Adler Freeman & Herz LLP announces that a federal securities class action lawsuit has been filed in the United States District Court for the Southern District of New York against Riskified Ltd. (NYSE: RSKD) on behalf of shareholders who purchased Class A common stock directly under the offering or traceable to Riskified’s July 2021 IPO (the “IPO”).
All investors who purchased the shares of Riskified Ltd. and suffered losses are advised to contact the company immediately at email@example.com or (800) 575-0735 or (212) 545-4774. You can get additional information about the action or join the case on our website, www.whafh.com.
If you have suffered losses in Riskified Ltd., you can, no later than July 1, 2022, ask the Court to name you as the lead plaintiff in the proposed class. Please contact Wolf Haldenstein to find out more about your rights as an investor in Riskified Ltd.
PLEASE CLICK HERE TO JOIN THE CASE
On July 1, 2021, Riskified filed with the United States Securities and Exchange Commission (“SEC”) a registration statement on Form F-1 for the IPO, which, after several amendments, has been declared effective July 28, 2021 (the “Registration Statement Statement”). 20.125 million shares of risky Class A common stock were sold to the public at $21 per share, raising gross proceeds of over $422 million.
The class action lawsuit Riskified alleges that the IPO’s registration statement misrepresented material facts because it failed to disclose the following adverse facts that existed at the time of the IPO:
- as Riskified grew its user base, the quality of Riskified’s machine learning platform deteriorated (rather than improved as stated in the registration statement), due to, among other things, inaccuracies in the algorithms associated with onboarding new merchants and entering new geographies and industries;
- Riskified had expanded its customer base into industries with relatively high fraud rates – including partnerships with cryptocurrency and money transfer businesses – in which Riskified had limited experience and this expansion had a negative impact on the effectiveness of Riskified’s machine learning platform;
- as a result, Riskified suffered from significantly higher chargebacks and cost of revenue and depressed gross profits and gross profit margins in its third fiscal quarter of 2021; and
- thus, statements in the registration statement regarding Riskified’s historical financial and operating measures and purported market opportunities did not accurately reflect the actual business, operations and financial results and trajectory of Riskified before and at the time of the IPO, and were materially false and misleading. , and lacked a factual basis.
On September 9, 2021, during a conference call to discuss Riskified’s financial results for the second quarter ended June 30, 2021, Riskified’s Chief Financial Officer, Defendant Aglika Dotcheva, stated that Riskified tended to “to incur higher chargebacks when we enter a new industry.”
Subsequently, on November 16, 2021, Riskified announced its results for the third quarter ended September 30, 2021, revealing that Riskified’s revenue growth had fallen to 26% year-over-year, value growth Riskified’s Gross Merchandise (“GMV”) fell 28% year-over-year, Riskified’s gross profits were up only 10% year-over-year, profit margins Riskified’s gross fell just 46% in the quarter and Riskified’s gross profit fell sequentially to $24.3 million. Additionally, Riskified’s cost of revenue had jumped to $28.3 million in Q3 2021, primarily due to a sharp increase in chargeback spending. On the earnings call, defendant Dotcheva blamed Riskified’s growing merchant base as the primary cause of the increase in chargebacks.
Finally, on February 23, 2022, Riskified announced its results for the fourth quarter and fiscal year ended December 31, 2021, revealing that Riskified’s revenue growth and GMV growth continued to slow, margin growth Riskified’s gross revenue remained subdued and Riskified’s cost of revenue continued to climb. During the earnings call on the same day, defendant Dotcheva said the year-over-year decline in gross profit margin had been “was primarily driven by expansion into new industries and regions, growth in travel industry tickets as a percentage of total billings as well as new merchant onboarding.
Risky Class A shares are currently trading at nearly $5 per share, nearly 80% below the IPO price of $21 per share.
Wolf Haldenstein has extensive experience in prosecuting securities class action and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. This firm’s reputation and expertise in shareholder litigation and other class actions have been repeatedly recognized by the courts, which have appointed it to major positions in complex, multi-district and consolidated securities litigation.
If you wish to discuss this action or have any questions regarding your rights and interests in this matter, please contact Wolf Haldenstein immediately by phone at (800) 575-0735 or by email at firstname.lastname@example.org
Wolf Haldenstein Adler Freeman & Herz LLP
Patrick Donovan, Esq.
Gregory Stone, Director of Business and Financial Analysis
Email: email@example.com, firstname.lastname@example.org or email@example.com
Tel: (800) 575-0735 or (212) 545-4774
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