Green Dot Corporation
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of those who acquired Green Dot Corporation (“Green Dot” or the “Company”) (NYSE: GDOT) securities during the period from May 9, 2018 through November 7, 2019 (the “Class Period”). Investors have until February 17, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The lawsuit alleges that the Company failed to disclose that: (i) Green Dot’s strategy to attract “high-value” long-term customers was at the expense of “one and done” customers; (ii) Green Dot’s “one and done” customers represented a significant source of revenues in its legacy segment; and (iii) consequently, Green Dot’s strategy was self-sabotaging.
On February 20, 2019, CEO Steven W. Streit began to reveal that Green Dot’s strategy was self-sabotaging: “we are somewhat a victim of our own success in converting more and more of our quarterly active accounts to direct deposit active accounts.” On this news, the price of Green Dot shares fell $7.47, or 10.0%, to close at $67.20 per share on February 21, 2019.
On May 8, 2019, Green Dot suddenly disclosed a large “investment in growth for the purpose of aggressively marketing new products.” Green Dot’s CEO also stated that the Company’s cash back rewards cards were “designed to attract high-value long-term customers sometimes at the expense of low value or what we call one and done customers.” On this news, the price of Green Dot shares fell $16.71, or 26.4%, to close at $46.56 per share on May 9, 2019.
On August 7, 2019, Green Dot disclosed additional problems with the legacy products and reduced its fiscal year outlook. Specifically, “[o]n a year-over-year basis, we experienced an accelerated loss of unit sales in our prepaid product lines, resulting in lower active accounts from both non-reloading customers and cash reloading customers.” On this news, the price of Green Dot shares fell $19.84, or nearly 50%, to close at $27.42 per share on August 8, 2019.
Finally, on November 7, 2019, Green Dot revealed that the continuing year-over-year decline of accounts in its active consumer business approximated 620,000 and were mostly “onetime use accounts.” On this news, the price of Green Dot shares fell $5.41, or 18.1%, to close at $24.54 per share on November 8, 2019.
If you acquired Green Dot securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.