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RISKIFIED LTD. CLASS ACTION ALERT: Wolf Haldenstein Adler Freeman & Herz LLP announces that a securities class action lawsuit has been filed in the United States District Court for the Southern District of New York against Riskified Ltd.

RSKD

LEAD PLAINTIFF DEADLINE IS JULY 1, 2022

NEW YORK, May 6, 2022 /PRNewswire/ -- Wolf Haldenstein Adler Freeman & Herz LLPannounces that a federal securities class action lawsuit has been filed in the United States District Court for the Southern District of New York against Riskified Ltd. (NYSE: RSKD) on behalf of shareholders who purchased Class A ordinary shares directly on the offering or traceable to Riskified's July 2021 initial public offering (the "IPO").

(PRNewsfoto/Wolf Haldenstein Adler Freeman )

All investors who purchased the shares of Riskified Ltd. and incurred losses are advised to contact the firm immediately at classmember@whafh.com or (800) 575-0735 or (212) 545-4774. You may obtain additional information concerning the action or join the case on our website, www.whafh.com.

If you have incurred losses in Riskified Ltd. you may, no later than July 1, 2022, request that the Court appoint you lead plaintiff of the proposed class. Please contact Wolf Haldenstein to learn more about your rights as an investor in Riskified Ltd.

PLEASE CLICK HERE TO JOIN THE CASE

On July 1, 2021, Riskified filed with the U.S. Securities and Exchange Commission ("SEC") a registration statement on Form F-1 for the IPO, which, after several amendments, was declared effective on July 28, 2021 (the "Registration Statement"). 20.125 million Riskified Class A ordinary shares were sold to the public at $21 per share, generating over $422 million in gross proceeds.

The Riskified class action lawsuit alleges that the IPO's Registration Statement made inaccurate statements of material fact because they failed to disclose the following adverse facts that existed at the time of the IPO:

  • as Riskified expanded its user base, the quality of Riskified's machine learning platform had deteriorated (rather than improved as represented in the Registration Statement), because of, among other things, inaccuracies in the algorithms associated with onboarding new merchants and entering new geographies and industries;

  • Riskified had expanded its customer base into industries with relatively high rates of fraud – including partnerships with cryptocurrency and remittance business – in which Riskified had limited experience and that this expansion has negatively impacted the effectiveness of Riskified's machine learning platform;

  • as a result, Riskified was suffering from materially higher chargebacks and cost of revenue and depressed gross profits and gross profit margins during its third fiscal quarter of 2021; and

  • thus, the Registration Statement's representations regarding Riskified's historical financial and operational metrics and purported market opportunities did not accurately reflect the actual business, operations, and financial results and trajectory of Riskified prior to and at the time of the IPO, and were materially false and misleading, and lacked a factual basis.

On September 9, 2021, during a conference call to discuss Riskified's financial results for the second quarter ended June 30, 2021, Riskified's CFO, defendant Aglika Dotcheva, stated that Riskified tended "to experience higher chargebacks when we enter a new industry."

Subsequently, on November 16, 2021, Riskified announced its third quarter ended September 30, 2021 results, revealing that Riskified's revenue growth had declined to 26% year-over-year, Riskified's Gross Merchandise Value ("GMV") growth had declined to 28% year-over-year, Riskified's gross profits had increased only 10% year-over-year, Riskified's gross profit margins had plummeted to just 46% during the quarter, and Riskified's gross profit fell sequentially to $24.3 million. In addition, 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. During the earnings call, defendant Dotcheva blamed Riskified's growing merchant base as a primary cause of increased chargebacks.

Finally, on February 23, 2022, Riskified announced its fourth quarter and year ended December 31, 2021 results, disclosing that Riskified's revenue growth and GMV growth had continued to decelerate, Riskified's gross profit growth remained muted, and Riskified's cost of revenue had continued to climb. During the earnings call the same day, defendant Dotcheva stated that the year-over-year decline in gross profit margin experienced "was driven primarily by expansion into new industries and regions, increase of the tickets in travel industry as a percentage of total billings as well as the onboarding of new merchants.

Riskified Class A shares are currently trading near $5 per share, close to 80% below the IPO price of $21 per share.

Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.

If you wish to discuss this action or have any questions regarding your rights and interests in this case, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735 or via e-mail at classmember@whafh.com

Contact:

Wolf Haldenstein Adler Freeman & Herz LLP
Patrick Donovan, Esq.
Gregory Stone, Director of Case and Financial Analysis
Email: gstone@whafh.com, donovan@whafh.com or classmember@whafh.com
Tel: (800) 575-0735 or (212) 545-4774

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/riskified-ltd-class-action-alert-wolf-haldenstein-adler-freeman--herz-llp-announces-that-a-securities-class-action-lawsuit-has-been-filed-in-the-united-states-district-court-for-the-southern-district-of-new-york-against-riskifi-301541710.html

SOURCE Wolf Haldenstein Adler Freeman & Herz LLP

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