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Sunday, November 27, 2022
INVESTOR ALERT: The Law Offices of Timothy L. Miles Reminds Investors of a Lawsuit Against LifeStance Health Group, Inc.

Class action lawsuit charges LifeStance Health and certain of its top executive officers with violations of the Securities Exchange Act of 1933.

 

The Law Offices of Timothy L. Miles, who has been leading the fight to protect shareholder rights for over 20 years, reminds investors that a that a purchaser of LifeStance Health Group, Inc. (NASDAQ: LFST) who suffered losses in LifeStance Health stock, filed a class action complaint against the Company for alleged violations of the Securities Exchange Act of 1933. The LifeStance Health class action lawsuit seeks to represent purchasers of LifeStance Health common stock issued in connection with LifeStance Health’s June 10, 2021 initial public stock offering (the “IPO”). Captioned Nayani v. LifeStance Health Group, Inc., No. 22-cv-06833 (S.D.N.Y.) the LifeStance Health class action lawsuit charges LifeStance Health, certain of its top executives and directors, as well as the IPO’s underwriters with violations of the Securities Act of 1933.

If you suffered losses in LifeStance Health stock or would like additional information, please visit us here.

Allegations in the LifeStance Health Class Action Lawsuit

LifeStance Health is one of the nation’s largest providers of virtual and in-person outpatient mental health care. LifeStance Health benefitted from the state and local lockdown orders necessitated by the COVID-19 pandemic starting in the spring of 2020. But by December 2020, several COVID-19 vaccines were being approved and administered, meaning LifeStance Health’s access to clients seeking virtual mental health services would significantly decline while demand for in-person services would increase. LifeStance Health conducted its IPO on June 10, 2021, selling 46 million shares at $18.00 per share, raising $828 million in gross proceeds.

However, as the LifeStance Health class action lawsuit alleges, the IPO’s registration statement failed to disclose the following material facts: (i) that the number of virtual visits clients were undertaking utilizing LifeStance Health was decreasing as the COVID-19 lockdowns were being lifted, thereby flatlining LifeStance Health’s out-patient/virtual revenue growth; (ii) that the percentage of in-person visits clients were undertaking utilizing LifeStance Health was increasing as the COVID-19 lockdowns were being lifted, thereby causing LifeStance Health’s operating expenses to increase substantially; (iii) that LifeStance Health 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 Health 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 Health’s business metrics and financial prospects were not as strong as the IPO’s registration statement represented.

At the time of the LifeStance Health class action lawsuit’s filing, LifeStance Health common stock traded in a range of $4.77-$7.70, a reduction of upwards of 73% from the price the shares were sold at in the IPO.

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