Shareholder rights law firm Robbins LLP announces that a class action was filed on behalf of all persons and entities who purchased or otherwise acquired loanDepot, Inc. (NYSE: LDI) pursuant to or traceable to the Company’s Registration Statement and Prospectus issued in connection with the Company’s February 2021 initial public offering (“IPO”). The complaint seeks remedies under the Securities Act of 1933. loanDepot is an independent retail mortgage lender that provides residential loans, refinance loans, and personal loan products nationwide.
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loanDepot, Inc. (LDI) Materially Misrepresented its Business Prospects in Connection with its IPO
According to the complaint, the Registration Statement in connection with the Company’s IPO stated that the Company’s “innovative technology” had allowed it to realize significantly increased revenues and profitability and rapidly increasing loan origination growth. The Prospectus stated that loanDepot had significantly increased its market share and was well-positioned to protect and grow that market share through its proprietary “platform and technology,” which supposedly gave loanDepot a “significant financial advantage.”
However, these statements were false and misleading. Specifically, defendants failed to disclose to investors that: (i) the Company’s refinance originations had already declined substantially at the time of the IPO due to industry over-capacity and increased competition; (ii) the Company’s gain-on-sale margins had already declined substantially at the time of the IPO; and (iii) as a result, the Company’s revenue and growth would be negatively impacted.
On August 3, 2021, loanDepot announced disappointing Q2 2021 results. In so doing, the founder, Chairman, and CEO admitted that everything about loanDepot’s business is “highly predictable” and thus loanDepot had visibility at the time of the IPO as to where its business was and was going. By August 17, 2021, loanDepot’s stock had declined to $8.07 per share, a more than 42% decline from the IPO price.
If you purchased shares of loanDepot, Inc. (LDI) securities in connection with the Company’s February 2021 IPO, you have until November 8, 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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