Did you lose money on investments in Riskified Ltd.? If so, please visit Riskified Ltd. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.
NEW YORK, May 04, 2022 (GLOBE NEWSWIRE) — Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the Class A ordinary shares of Riskified Ltd. (“Riskified” or the “Company”) (NYSE: RSKD) in or traceable to the Company’s July 2021 initial public offering (the “IPO”) of 20.125 million Riskified shares at $21 per share. The lawsuit was filed in the United States District Court for the Southern District of New York and alleges violations of the Securities Exchange Act of 1933.
Riskified operates a risk management platform that utilizes machine learning to protect its merchant-clients from fraud. The Company’s proprietary machine learning platform purportedly identifies the individual behind each online interaction, helping Riskified’s online merchant customers eliminate risk from their business. Riskified charges merchants a percentage of every dollar of Gross Merchandise Value (“GMV”) that it approves (i.e., is deemed non-fraudulent by Riskified’s proprietary fraud-detection software). If an approved transaction results in a chargeback (a charge reversal that occurs when a cardholder disputes a transaction), Riskified reimburses the merchant for the amount of the lost sale as part of its “chargeback guarantee.”
Leading up to the IPO, Riskified claimed that it was experiencing tremendous revenue growth, stating that its revenue grew 55% in the first quarter of 2021 compared to the first quarter of 2020. Riskified also stated that its GMV grew 77%, gross profit grew 65%, and adjusted EBITDA went from a $3.1 million loss to a $296,000 loss, respectively, from the first quarter of 2020 to the first quarter of 2021.
On July 1, 2021, the Company filed with the SEC a registration statement on Form F1 for the IPO, which, after several amendments, was declared effective on July 28, 2021 (the “Registration Statement”).
Plaintiff alleges that the Registration Statement was materially false and misleading because it failed to disclose that: (a) as Riskified expanded its user base, the quality of the Company’s machine learning platform had deteriorated (rather than improved as represented in the Registration Statement); (b) Riskified had expanded its customer base into industries with relatively high rates of fraud – including partnerships with cryptocurrency and remittance business – in which the Company had limited experience, and that this expansion had negatively impacted the effectiveness of the Company’s machine learning platform; and (c) Riskified suffered from materially higher chargebacks and cost of revenue and depressed gross profits and gross profit margins during its third fiscal quarter of 2021.
On September 9, 2021, Riskified issued a press release announcing the Company’s financial results for the second quarter ended June 30, 2021 – i.e., the quarter prior to the IPO. On a conference calls, defendant Dotcheva, the Company’s Chief Financial Officer, stated that Riskified tended “to experience higher chargebacks when we enter a new industry.”
On November 16, 2021, Riskified issued a press release announcing the Company’s financial results for the third quarter ended September 30, 2021 – i.e., the quarter during which the IPO was conducted. The release reported, among other things, that Riskified’s revenue growth had declined to 26% year-over-year, compared to 55% and 47% revenue growth year-over-year for the first and second quarters of 2021 respectively. Riskified’s GMV growth had also declined to 28% year-over-year compared to 77% and 55%, respectively, for the first two quarters of 2021.
On February 23, 2022, Riskified issued a press release announcing the Company’s financial results for the fourth quarter and year ended December 31, 2021. The release reported that Riskified’s revenue growth and GMV growth had continued to decelerate during the quarter to just 22% and 23%, respectively, year-over-year. Further, Riskified’s gross profit growth remained muted, at just 10.7% year-over-year.
If you wish to serve as lead plaintiff, you must move the Court no later than July 1, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased or otherwise acquired RSKD Class A ordinary shares in or traceable to the Company’s IPO, and/or would like to discuss your legal rights and options please visit Riskiified Ltd. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected].
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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