SAN DIEGO, CA / ACCESSWIRE / October 11, 2021 / Shareholder rights law firm Robbins LLP announces that a class action lawsuit was filed on October 7, 2021, on behalf of all persons and entities that purchased or otherwise acquired SelectQuote, Inc. (NYSE:SLQT) securities either traceable to the Company's May 20, 2020 initial public offering ("IPO") or between May 20, 2020 and August 25, 2021. The complaint alleges violations of the Securities Act of 1933 and Securities Exchange Act of 1934. SelectQuote is a direct-to-consumer distribution platform that offers complex senior health, life, and auto & home insurance policies from a panel of insurance carriers.
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SelectQuote, Inc. (SLQT) Failed to Disclose Underperformance of its PDP Products
According to the complaint, the Company conducted its IPO on May 20, 2020, offering more than 18 million shares at $20 per share, raising over $360 million in gross proceeds. During the class period, SelectQuote failed to disclose to investors that its 2019 cohort was underperforming. Rather, the Company repeatedly reported inflated revenues, earnings, and accounts receivables, as well as the revenue per policy and lifetime value per policy. Due to these misrepresentations, SelectQuote shares traded at artificially inflated prices.
On May 11, 2021, SelectQuote disclosed that its fourth quarter financial results would be impacted by a "negative cohort and tail adjustment" due to "lower second-term persistency for the 2019 cohort." On this news, the Company's share price fell $5.50, or 20%, to close at $21.90 per share on May 12, 2021. Then, on August 25, 2021, SelectQuote disclosed that lack of policy renewals affected both the 2019 and 2020 cohorts, and that the Company was including a $65 million placeholder for the risk of an additional cohort tail adjustment the following year, driven mostly by lower-than-expected persistency results in the 2020 cohort. After these disclosures, SelectQuote's share price fell by an addition $6.46, or 45%.
If you purchased shares of SelectQuote, Inc. (SLQT) securities traceable to the Company's May 20, 2020 IPO or between May 20, 2020 and August 25, 2021, you have until October 15, 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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SOURCE: Robbins LLP