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SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Riskified Ltd. - RSKD
News provided byPomerantz LLP
May 11, 2022, 10:45 PM ET
NEW YORK, May 11, 2022 /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of Riskified Ltd. ("Riskified" or the "Company") (NYSE: RSKD). Such investors are advised to contact Robert S. Willoughby at firstname.lastname@example.org or 888-476-6529, ext. 7980.
The investigation concerns whether Riskified and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
In July 2021, Riskified conducted its initial public offering ("IPO"), selling 20.125 million Class A ordinary shares priced at $21.00 per share. 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 call to discuss the results, the Company 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 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. Similarly, Riskified's GMV growth had declined to 28% year-over-year compared to 77% and 55% respectively for the first two quarters of 2021. Moreover, the Company's gross profits had increased only 10% year-over-year, far below the Company's already decelerated revenue growth trajectory. The Company's gross profit margins had plummeted to just 46% during the quarter, compared to 56% and 60% in the first and second quarter of 2021 respectively, as gross profit fell sequentially to $24.3 million compared to $28.6 million and $33.3 million in the first and second quarters of 2021 respectively. 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, representing a 50% increase year-over-year and nearly 30% above the Company's cost of revenue for the first and second 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-growth during the quarter, and the Company's cost of revenue had continued to climb to more than $33 million during the quarter compared to just $23.9 million during the fourth quarter of 2020. In addition, the release stated that Riskified 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 EBITDA of between negative $69 million and $66 million (which would more than triple the losses suffered by the Company in 2021), indicating that the adverse business trends being suffered by the Company were in fact accelerating.
Since the IPO, Riskified's stock has closed as low as $5.23 per share, representing a decline of more than 75% from the offering price.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP