LOS ANGELES, Jan. 7, 2022 /PRNewswire/ -- The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Robinhood Markets, Inc. ("Robinhood" or the "Company") (NASDAQ: HOOD) common stock pursuant and/or traceable to the Registration Statement issued in connection with the Company's July 2021 initial public offering (the "IPO" or "Offering"); Robinhood investors have until February 15, 2022 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On or about July 30, 2021, Robinhood conducted its IPO, offering 55 million shares of its common stock to the public at a price of $38 per share.
On October 26, 2021, after the markets closed, Robinhood released its third quarter financial results, revealing that its total net revenue had missed analyst estimates by nearly $73 million. The company also disclosed that transaction based revenue from cryptocurrency trading, which had earned $233 million in the second quarter before the IPO, had decreased to $51 million in the third quarter.
On this news, Robinhood's stock fell $4.14, or 10%, to close at $35.44 per share on October 27, 2021, thereby injuring investors.
Then, on November 8, 2021, after the markets closed, Robinhood revealed that it had suffered a "data security incident" on November 3, 2021, in which an unauthorized third party had gained access to email addresses for approximately five million users and full names of around two million users – nearly 40% of Robinhood's users.
On this news, Robinhood's stock declined $3.49, or 9%, over the next two consecutive trading days to close at $34.49 per share on November 10, 2021, thereby injuring investors further.
The complaint filed in this class action alleges that the Registration Statement was materially misleading because it failed to disclose, among other things, that at the time of the IPO, Robinhood's revenue growth was experiencing a major reversal, with transaction-based revenues from cryptocurrency trading serving only as a short-term, transitory injection, masking what was actually stagnating growth. In addition, the Company's "significant investments" in enhancing the reliability and scalability of its platform were patently inadequate and/or defective, exposing Robinhood to worsening service-level disruptions and security breaches, particularly as the Company scaled its services to a larger user base.
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If you purchased Robinhood common stock during the Class Period, you may move the Court no later than February 15, 2022 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Robinhood common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at . If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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SOURCE The Law Offices of Frank R. Cruz, Los Angeles