SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that purchasers of StoneCo Ltd. (NASDAQ: STNE) securities between March 11, 2021 and November 16, 2021, inclusive (“Class Period”) have until this upcoming Tuesday, January 18, 2022 to seek appointment in Ray v. StoneCo Ltd., No. 21-cv-09620 (S.D.N.Y.). Commenced on November 19, 2021, the StoneCo class action lawsuit charges StoneCo and certain of its top executives with violations of the Securities Exchange Act of 1934. A similar lawsuit, captioned Depue v. StoneCo Ltd., No. 21-cv-10468, is also pending in the Southern District of New York.
If you suffered substantial losses and wish to serve as lead plaintiff of the StoneCo class action lawsuit, please provide your information by clicking here. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at jsanchez@rgrdlaw.com.
CASE ALLEGATIONS: StoneCo is a provider of financial technology solutions that allows merchants and other vendors to conduct electronic commerce across in-store, online, and mobile channels, primarily in Brazil.
The StoneCo class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) StoneCo was experiencing difficulties in implementing its credit product; (ii) StoneCo faced significant risks via its point-of-sale vendor, PAX Global Technology Ltd.; (iii) as a result, StoneCo’s financial results would be adversely impacted; and (iv) consequently, defendants’ positive statements about StoneCo’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On August 30, 2021, StoneCo reported an 8.1% year-over-year decrease in revenue “mainly due to adjustments in credit fair value and significantly lower credit disbursements.” StoneCo further reported 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.” On this news, StoneCo’s share price fell.
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, StoneCo states that PAX “is no longer [its] sole provider of POS services, [but StoneCo 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, StoneCo’s share price fell an additional 7%.
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.” StoneCo could not provide specific guidance about when credit volumes would return to levels before StoneCo had halted origination of credit. On this news, StoneCo’s share price fell another 34%, further damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased StoneCo securities during the Class Period to seek appointment as lead plaintiff in the StoneCo class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the StoneCo class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the StoneCo class action lawsuit. An investor’s ability to share in any potential future recovery of the StoneCo class action lawsuit is not dependent upon serving as lead plaintiff.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors that year, more than double the amount recovered by any other securities plaintiffs’ firm. Please visit http://www.rgrdlaw.com for more information.
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