STONECO LDT. SHAREHOLDERS HAVE AN OPPORTUNITY TO RECOVER THEIR INVESTMENT LOSSES
Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of those who purchased or acquired the securities of StoneCo Ltd. (NASDAQ: STNE) between January 11, 2021 and November 16, 2021. The lawsuit seeks to recover StoneCo Ltd. shareholders’ investment losses.
If you purchased shares of StoneCo Ltd. between January 11, 2021 and November 16, 2021 and would like to discuss your legal rights and/or options, please click “Join Class Action” above.
STONECO LDT. (NASDAQ: STNE) SHAREHOLDER CLASS ACTION ALERT: Bernstein Liebhard LLP Announces that a Securities Class Action Lawsuit Has Been Filed Against StoneCo Ltd.
New York, New York — Bernstein Liebhard, a nationally acclaimed investor rights law firm, announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired the securities of StoneCo Ltd. (“StoneCo”) (NASDAQ: STNE) between January 11, 2021 and November 16, 2021, inclusive (the “Class Period”). The lawsuit was filed in the United States District Court for the Southern District of New York and alleges violations of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
StoneCo is a provider of financial technology solutions. StoneCo’s services allow merchants and other vendors to conduct electronic commerce across in-store, online, and mobile channels, primarily in Brazil.
For most of 2020 and 2021, the COVID-19 pandemic was a boon for Peloton. Because stay-at-home orders and business closures kept many people out of the gym, the demand for in-home exercise options increased dramatically. Throughout the pandemic, including in the months leading up to the Class Period, Peloton experienced unprecedented demand for its products and services.
According to the complaint, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that StoneCo was experiencing difficulties in implementing its credit product; (2) that StoneCo faced significant risks via its point-of-sale vendor, PAX Global Technology Ltd.; (3) that, as a result of the foregoing, the Company’s financial results would be adversely impacted; and (4) that, as a result of the foregoing, Defendants positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On August 30, 2021, after the market closed, StoneCo announced its second quarter 2021 financial results in a press release, reporting an 8.1% year-over-year decrease in revenue “mainly due to adjustments in credit fair value and significantly lower credit disbursements.” The Company stated that it had “implemented some prudent actions, like temporarily stopping the disbursement of credit and increasing coverage for potential future losses, which impacted [StoneCo’s] reported results for the quarter.”
As a result of these disclosures, the Company’s share price fell $2.96, to close at $46.54 per share on August 31, 2021, on unusually heavy trading volume.
Then, on October 26, 2021, PAX Global Technology Ltd’s Florida offices were raided by the U.S. Federal Bureau of Investigation, the Department of Homeland Security, and several other agencies as part of a federal investigation. As a Viceroy Research report on October 27, 2021 pointed out, Stone states that PAX “is no longer [its] sole provider of POS services, [but the Company is] still substantially dependent on it to manufacture and assemble a substantial amount of [its] POS devices.” Moreover, another company replaced its PAX terminals “because it did not receive satisfactory answers from PAX regarding its POS devices connecting to websites not listed in their supplied documentation.”
On this news, the Company’s share price fell $2.64, or 7%, to close at $33.81 per share on October 27, 2021, thereby injuring investors further.
Finally, on November 16, 2021, StoneCo announced that it would “start retesting our original [credit] product, which is short-term loans, between the fourth quarter of ’21 and the first quarter of ’22.” The Company could not provide specific guidance about when credit volumes would return to levels before StoneCo had halted origination of credit.
On this news, the Company’s share price fell $10.96, or 34%, to close at $20.70 per share on November 17, 2021, thereby injuring investors further.
If you wish to serve as lead plaintiff, you must move the Court no later than January 18, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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