LifeStance Health Group, Inc.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired LifeStance Health Group, Inc. (“LifeStance” or the “Company”) (NASDAQ: LFST) securities pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with LifeStance’s June 10, 2021 initial public stock offering (the “IPO”). Investors have until October 11, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
LifeStance is one of the nation’s largest providers of virtual and in-person outpatient mental health care.
On June 10, 2021, LifeStance conducted its IPO, selling 46 million shares at $18.00 per share. On August 11, 2022, the Company disclosed that it had experienced a significant negative “recent change in clinician retention levels” during the second quarter of fiscal year 2021. On this news, the price of LifeStance shares declined by $10.16, or approximately 46.46%, from $21.87 per share to close at $11.71 on August 12, 2021.
By August 10, 2022, the price of LifeStance shares had declined to $7.86, a decline of $10.14, or approximately 56.3%, from the $18.00 per share IPO price.
The lawsuit alleges that, in the IPO offering documents, Defendants failed to disclose to investors that: (i) the number of virtual visits clients were undertaking utilizing LifeStance was decreasing as the COVID-19 lockdowns were being lifted, thereby flatlining LifeStance’s out-patient/virtual revenue growth; (ii) the percentage of in-person visits clients were undertaking utilizing LifeStance was increasing as the COVID-19 lockdowns were being lifted, thereby causing LifeStance operating expenses to increase substantially; (iii) LifeStance had lost a large number of physicians due to burn-out and, as a result, its physician retention rate had fallen significantly below the 87% highlighted in the IPO’s registration statement and LifeStance had been expending additional costs to onboard new physicians who were less productive than the outgoing physicians they were replacing; and (iv) as a result, LifeStance’s business metrics and financial prospects were not as strong as the IPO’s registration statement represented.