James (Josh) Wilson, partner in securities lawsuits, encourages investors who have incurred more than $50,000 losses in rockets to contact him directly to discuss their options
NEW YORK, NY – (Newsfile Corp. – August 6, 2021) – Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Rocket Companies, Inc. (“Rocket” or “The Company”) (NYSE: RKT) reminds investors of the August 30, 2021 deadline to seek the role of lead plaintiff in a class of federal securities lawsuit brought against the Company.
If you sustain losses of more than $50,000, invest in Rocket stock or options between February 25, 2021 and May 5, 2021 And you wish to discuss your legal rights, contact Faruqi & Faruqi’s partner Josh Wilson live in a 4292-247-877 or 212-983-9330 (ext. 1310). You can also click here for additional information: www.faruqilaw.com/RKT.
There is no cost or obligation to you.
Farooqi & Farooqi is a leading national minority and women-owned securities law firm with offices in New York, Delaware, Pennsylvania, California and Georgia.
As detailed below, the lawsuit focuses on whether the company and its executives violated federal securities laws by making incorrect and/or misleading statements and/or failing to disclose the following: favorable towards the low-margin partner network operating segment and pressure in the spread of prices between the primary and secondary mortgage markets; (ii) Rocket has been engaged in a price war and battle for market share with its core competitors in the wholesale market, further compressing margins in the operating segment of Rocket’s Partner Network; (3) The opposite trends identified overhead were accelerating, and as a result, Rocket’s gains in selling margins were on track to decline by at fewest 140 basis points in the first six months of 2021; (iv) As a result of the foregoing, the favorable market conditions leading up to the category period faded away and allowed Rocket to accomplish historically lofty gains from selling margins as the company’s profits from selling margins returned to levels not seen since the first quarter of 2019; (5) Instead of remaining lofty due to higher demand, gain margins on the Rocket level sale have fallen substantially below recent historical averages; and (vi) as a result of the foregoing, the defendants’ positive statements about the Company’s business operations and expectations were materially misleading and/or lacking a reasonable basis.
On May 5, 2021, Rocket issued a press release announcing its first-quarter results and second-quarter forecasts. Rocket reported that it is on track to accomplish closed loan volume in the range of only $82.5 billion and $87.5 billion and acquire from selling margins in the range of just 2.65% to 2.95% for the second quarter of 2021. This acquire from the estimated selling margin equals a decrease of 2% 239 basis points year over year and 94 basis points sequential decline, which represented the company’s lowest quarterly gain on selling margin in two years. The collapse in the company’s gain from selling margin reflects the fact that the favorable market conditions that the company allegedly experienced during the class period were actually reversed. During a conference call to explain the results, defendant Booth revealed that the sharp drop in quarterly gain on the selling margin was caused by three factors: (1) pressure on loan pricing; (ii) product mix shifted to Rocket’s low-margin partner network segment; and (3) pressure in the spreads between the primary and secondary mortgage markets. Defendant Booth also admitted that some of these trends began “at the end of the first quarter of the year,” prior massive insider sales by RHI.
Based on this news, Rocket’s Class A common stock price fell $3.79 per share, or 16.62%, to close at $19.01 per share on May 6, 2021, with a massive trading volume of over 37 million shares. As the market continued to digest the news in the days that followed, Rocket’s Class A share price continued to fall, dropping to as low as $16.48 per share by May 11, 2021.
The court-appointed lead plaintiff is the investor with the greatest financial interest in the relief sought by the class and which is appropriate and typical for members of the class that directs and oversees litigation on behalf of the presumed class. Any member of the presumed class may transfer the court to serve as lead plaintiff through a counsel of his choosing, or he may choose to do nothing and remain an absentee member of the class. Your aptitude to participate in any redemption is not affected by the decision to act as lead claimant or not.
Faruqi & Faruqi, LLP also encourages anyone with information relating to Rocket’s conduct to contact the Company, including whistleblowers, previous employees, shareholders and others.
Advertisement attorney. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Past results do not guarantee or expect a similar result with respect to any coming matter. We welcome the opportunity to discuss your own case. All communications will be treated confidentially.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/92411