NEW YORK, Jan. 24, 2019 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed
against, Greensky, Inc. (“Greensky” or the “Company”) (NASDAQ: GSKY) and certain of its officers. The class action,
filed in United States District Court, Southern District of New York, and indexed under 19-cv-00100, is on behalf of a class
consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise, acquired GreenSky
Class A common stock pursuant or traceable to the Company’s false and misleading registration statement and prospectus, who were
damaged thereby, and who seek to pursue remedies under the Securities Act of 1933 (“Securities Act”).
If you are a shareholder who purchased Greensky Class A common stock pursuant or traceable to the Company’s
registration statement and prospectus, you have until January 28, 2019, to ask the Court to appoint you as Lead Plaintiff for the
class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who
inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here to join this class action]
GreenSky is a financial technology company in Atlanta, Georgia, and runs an online platform that allows
creditors to process loan applications at the point of sale. GreenSky’s platform is actively used by over 10,000 businesses.
Consumers use GreenSky’s mobile app to make purchases from those listed business by applying for on-the-spot financing via the
app.
GreenSky’s two principal sources of revenue are: (i) “transaction fees” the Company receives upfront when a
consumer secures a loan through the GreenSky platform and makes a purchase; and (ii) recurring fees generated from banks over the
lives of loans it facilitates. Transaction fees are critical to GreenSky’s business. For example, transaction fees accounted for
87% of the Company’s revenue in 2017. These transaction fees vary per the particular agreement between GreenSky and a merchant.
On April 27, 2018, GreenSky filed a registration statement. Then, on May 25, 2018, GreenSky filed a prospectus
for its upcoming initial public offering (“IPO”). GreenSky’s registration statement and prospectus are referred to herein as the
“Offering Documents.”
On May 29, 2018, GreenSky’s IPO closed and the Company sold 43.7 million shares of Class A common stock at
$23.00 per share in its IPO, for gross proceeds of over $1 billion.
The complaint alleges that The Offering Documents were negligently prepared and, as a result, contained untrue
statements of material facts or omitted to state other facts necessary to make the statements made not misleading, and were not
prepared in accordance with the rules and regulations governing their preparation as the Offering Documents failed to disclose: (i)
that GreenSky was transitioning away from the solar power market in favor of the elective healthcare market; (ii) foreseeable
negative effects on GreenSky’s profits because of significant differences in transaction fees GreenSky charged to different classes
of merchants; (iii) the primacy of the merchant mix as a driver of GreenSky’s transaction-fee revenue; (iv) the ongoing
deterioration in GreenSky’s transaction-fee revenue, while touting GreenSky’s growth and financial performance; (v) the negative
impacts of GreenSky’s changing merchant mix on EBITDA; (vi) the markedly lower transaction fees GreenSky charges to healthcare
companies; and (vii) as a result of the foregoing, GreenSky’s Offering Documents were materially false and misleading at all
relevant times.
On August 7, 2018, GreenSky issued a release announcing its financial results for the second quarter of 2018.
The release indicated that the Company’s transaction-fee rate was approximately 53 basis points below the rate achieved in the
second quarter of 2017. In an earnings call, Defendant Zalik acknowledged that this rapid reduction was attributable to the
transition away from solar panel merchants and toward elective healthcare companies.
On November 6, 2018, 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 and lowered its full-year 2018 Adjusted EBITDA guidance from between $192 and $199 million
to between $165 and $175 million. GreenSky attributed the reduction to a general labor shortage and unfavorable shifts in its
loan mix.
Following these disclosures, GreenSky’s stock price closed at $9.28 per share, a decline of $13.72, or
approximately 60%, from the IPO price of $23.00 per share.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, 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, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80
years later, the Pomerantz Firm 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.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 9980
