INVESTOR ALERT: Howard G. Smith Law Firms Announce Securities Class Action Filing on Behalf of Rocket Companies, Inc. (RKT) Investors
BENSALEM, PA – (COMMERCIAL THREAD) – The law firm of Howard G. Smith announces that a class action lawsuit has been filed on behalf of the investors who purchased Rocket Companies, Inc. (“Rocket” or the “Company”) (NYSE: RKT) Class A ordinary shares between February 25, 2021 and May 5, 2021, inclusive (the “Class Period”). Rocket investors have up to August 30, 2021 file an application as the principal applicant.
Investors experiencing losses on their Rocket investments are encouraged to contact the law firms of Howard G. Smith to discuss their legal rights in this class action lawsuit at 888-638-4847 or by email at [email protected]
On May 5, 2021, Rocket announced first quarter 2021 financial results and second quarter 2021 outlook in a press release, stating that it expected closed loan volume in a range of just $ 82.5 billion. of dollars and $ 87.5 billion and a gain on selling margins in a range of only 2.65% to 2.95% for the second quarter of 2021. The midpoint of this estimated gain on selling margin was down 239 basis points year over year and down 94 basis points sequentially, which was Rocket’s lowest quarterly gain on selling margin in two years and reflected the fact that The favorable market conditions recently touted by the Company had in fact been reversed.
Following this news, the Company’s share price fell $ 3.79, or nearly 17%, to close at $ 19.01 per share on May 6, 2021.
On this news, the price of Class A common stock of Rocket Companies fell nearly 17% to close at $ 19.01 per share. The price of Rocket Companies’ Class A common stock continued to decline, falling to just $ 16.48 per share on May 11, 2021.
The complaint filed alleges that throughout the Claim Period, the Defendants made materially false and / or misleading statements, as well as failed to disclose material adverse facts regarding the business, operations and prospects of the Company. . Specifically, the Defendants failed to disclose to investors that: (1) the gain on Rocket’s selling margins was contracting at the highest rate in two years due to increased competition among mortgage lenders, unfavorable development towards the operating segment of the lower margin partner network, and compression of the price differential between the primary and secondary mortgage markets; (2) Rocket was engaged in a price war and battle for market share with its main competitors in the wholesale market, which further squeezed the margins of the operating segment of Rocket’s partner network; (3) the adverse trends identified above were accelerating and, as a result, the gain on Rocket’s sales margins was on track to decline by at least 140 basis points in the first six months of 2021; (4) As a result of the foregoing, the favorable market conditions which preceded the Class Period and allowed Rocket to achieve a historically high gain on selling margins had faded as the gain on margins of Rocket sales had returned to levels not seen since the first quarter of 2019; (5) instead of remaining high due to the strong increase in demand, Rocket’s company-wide sales profit margins were significantly lower than recent historical averages; and (6) as a result, the Defendants’ statements regarding its business, operations and prospects were materially false and misleading and / or lacked reasonable basis at all relevant times.
If you have purchased Class A common stock of Rocket, have any information or would like to learn more about these claims, or have any questions regarding this announcement or your rights or interests in any such matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, PA 19020, by phone at (215) 638-4847, toll free at (888) 638-4847, or by email at [email protected], or visit our website at www.howardsmithlaw.com.
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