NEW YORK, Jan. 15, 2019 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of GreenSky, Inc. ("GreenSky" or the "Company") (NASDAQ: GSKY). GreenSky is a financial technology company that runs an online platform for processing loan applications at the point of sale.
A class action complaint has been filed in the United States District Court for the Southern District of New York on behalf of investors who purchased GreenSky Class A common stock pursuant or traceable to the Company's Initial Public Offering ("IPO") that closed on or about May 29, 2018. In the IPO, GreenSky sold 43.7 million shares of Class A common stock at $23 per share for gross proceeds of $874 million.
According to the complaint, GreenSky has two principal sources of revenue: (1) "transaction fees" that the Company receives upfront when a consumer secures a loan through the GreenSky platform and makes a purchase; and (2) recurring fees generated from banks over the lives of loans the Company facilitates. Further, according to the complaint, transaction fees accounted for 87% of the Company's revenue in 2017. The complaint also alleges that GreenSky typically charges a 14% fee to solar panel merchants compared to its average transaction fee of 7%.
On August 7, 2018, GreenSky announced its financial results for the second quarter ended June 30, 2018. The press release indicated that the Company's transaction fees as a percentage of its total revenue had declined below the rate achieved in the second quarter of 2017. According to the complaint, the Company acknowledged during the conference call to discuss its quarterly results that the rapid reduction in the transaction fee rate was attributable to the transition away from solar panel merchants and towards healthcare companies. On August 7, 2018, GreenSky's shares declined $2.32 per share, nearly 11%, to close at $18.91 per share.
Then, on November 6, 2018, in connection with reporting its third quarter financial results, GreenSky lowered its full year 2018 transaction volume guidance from between $5.1 and $5.3 billion to between $4.9 and $5.1 billion. During the conference call to discuss its quarterly results, GreenSky's CEO and Chairman reportedly stated that "the transaction fee take rate is down about 70 basis points year-over-year, driven by the reduction in solar." On November 6, 2018, GreenSky's shares declined by $5.38 per share, or 36.7%, to close at $9.28 per share.
The complaint alleges that the offering documents for the Company's IPO touted GreenSky's growth and financial performance while failing to disclose that (i) GreenSky was transitioning away from the solar power market in favor of the elective healthcare market, and (ii) the foreseeable negative effects on GreenSky's profits because of significant differences in transaction fees GreenSky charged to different classes of merchants.
If you are a member of the proposed Class, you may move the court no later than January 28, 2019 to serve as a lead plaintiff for the purported class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to discuss the complaint or our investigation, please contact us by emailing email@example.com or by calling 800-290-1952.
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Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com. If you have any questions about this Notice, the action, your rights, or your interests, please contact:
Jeffrey P. Campisi
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
Fax: (212) 687-7714
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California 94104
Fax: (415) 772-4707
SOURCE Kaplan Fox & Kilsheimer LLP