SAN DIEGO--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a class action has been filed on behalf of all purchasers of Rocket Companies, Inc. (NYSE: RKT) between February 25, 2021 and May 5, 2021, for violations of the Securities Exchange Act of 1934. Rocket Companies is an online mortgage lender.
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Rocket Companies, Inc. (RKT) Made Misleading Statements Regarding its Business Prospects
According to the complaint, Rocket completed its initial public offering ("IPO") in August 2020, raising $1.8 billion in proceeds. The Registration Statement in support of the IPO represented that Rocket was experiencing a historic surge in demand for the Company's products, which had resulted in record-setting gain on sale margin, and had "significant opportunity for continued growth." After the IPO, Rocket continued to tout its increasing financial metrics, market demand, and continued opportunity growth. Despite the positive statements, the Company failed to disclose that Rocket's gain on sales margins were contracting at the highest rate in two years as a result of increased competition among mortgage lenders, and unfavorable shift toward the lower margin Partner Network operating segment, and compression in the price spread between the primary and secondary mortgage markets. Rocket also failed to disclose that it was engaged in a price war and battle for market share with its primary competitors in the wholesale market, which was further compressing margins in Rocket's Partner Network operating segment.
On May 5, 2021, Rocket issued a press release announcing first quarter results and second quarter outlook, indicating its lowest quarterly gain on sale margin in two years. On this news, Rocket's share price dropped nearly 17%, to close at $19.01 per share on May 6, 2021. The stock continued to decline, falling to $16.48 per share by May 11, 2021.
If you purchased shares of Rocket Companies, Inc. (RKT) between February 25, 2021 and May 5, 2021, you have until September 24, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
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