INVESTOR ALERT: Law Offices of Howard G. Smith Announces the Filing of a Securities Class Action on Behalf of Rocket Companies, Inc. (RKT) Investors
BENSALEM, Pa.--(BUSINESS WIRE)--Jul 2, 2021--
Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Rocket Companies, Inc. (“Rocket” or the “Company”) (NYSE: RKT ) Class A common stock between February 25, 2021and May 5, 2021, inclusive (the “Class Period”). Rocket investors have until August 30, 2021 to file a lead plaintiff motion.
Investors suffering losses on their Rocket investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
On May 5, 2021, Rocket announced first quarter 2021 financial results and second quarter 2021 outlook in a press release, reporting that it expected closed loan volume within a range of only $82.5 billion and $87.5 billion and gain on sale margins within a range of only 2.65% to 2.95% for the second quarter of 2021. The midpoint of this gain on sale margin estimate represented a 239 basis point decline year-over-year and a 94 basis point decline sequentially, which was Rocket’s lowest quarterly gain on sale margin in two years and reflected that favorable market conditions recently touted by the Company had in fact reversed.
On this news, the Company’s stock price fell $3.79, or nearly 17%, to close at $19.01 per share on May 6, 2021.
On this news, the price of Rocket Companies Class A common stock fell by nearly 17% to close at $19.01 per share. The price of Rocket Companies Class A common stock continued to decline, falling to a low of just $16.48 per share by May 11, 2021.
The complaint filed alleges that throughout the Class Period, 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 that: (1) Rocket’s gain on sale margins were contracting at the highest rate in two years as a result of increased competition among mortgage lenders, an unfavorable shift toward the lower margin Partner Network operating segment, and compression in the price spread between the primary and secondary mortgage markets; (2) Rocket was engaged in a price war and battle for market share with its primary competitors in the wholesale market, which was further compressing margins in Rocket’s Partner Network operating segment; (3) the adverse trends identified above were accelerating and, as a result, Rocket’s gain on sale margins were on track to plummet at least 140 basis points in the first six months of 2021; (4) as a result of the foregoing, the favorable market conditions that had preceded the Class Period and allowed Rocket to achieve historically high gain on sale margins had vanished as Rocket’s gain on sale margins had returned to levels not seen since the first quarter of 2019; (5) rather than remaining elevated due to surging demand, Rocket’s company-wide gain-on-sale margins had fallen materially below recent historical averages; and (6) as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
If you purchased Rocket’s Class A common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com:https://www.businesswire.com/news/home/20210702005022/en/
CONTACT: Law Offices of Howard G. Smith
Howard G. Smith, Esquire
KEYWORD: PENNSYLVANIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICES
SOURCE: Law Offices of Howard G. Smith
Copyright Business Wire 2021.
PUB: 07/02/2021 12:00 PM/DISC: 07/02/2021 12:01 PM