The Match Group is getting sued after being accused of violating federal securities law in connection with last year’s IPO.
A number of law firms – including Gainey McKenna & Egleston, Khang & Khang and Levi & Korsinsk – recently announced they have filed a class action lawsuit against The Match Group in the United States District Court for the Northern District of Texas, on behalf of people who purchased Match Group shares before its IPO.
The IPO commenced on November 18th, 2015, and the plaintiff aims to recoup financial remedies under section 11, 12(a)(2) and 15 of the Securities Act of 1933.
The lawsuit says that on November 19th, 2015, The Match Group sold 33,333,333 shares at $12.00 per share as part of its IPO.
But then on February 2nd, 2016, the company revealed to investors a “decline in total user growth and per-user revenue, and the cannibalization of users and revenues across competing platforms.”
The suit also says the company revealed its net income has “consistently fallen” and that there had been a decline in revenue in their Princeton Review segment.
This was revealed in its fourth quarter and full year 2015 results, with the company disclosing that its fourth quarter net income declined from $48m in the fourth quarter of 2014 to $35m in the fourth quarter of 2015.
In addition to this, its annual net income declined from $147m in 2014 to $120m in 2015.
After the announcement, shares fell from $12.79 to a recent close of just $9.76 on February 4th, 2016.
The firms are now asking shareholders to join the case, setting a deadline of April 26th, 2016.