NEW YORK, Oct. 31, 2022 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Opendoor Technologies, Inc. (NASDAQ: OPEN), Schmitt Industries, Inc. (NASDAQ: SMIT), and Block, Inc. (NYSE: SQ). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Opendoor Technologies, Inc. (NASDAQ: OPEN)
Class Period: December 21, 2020 – September 16, 2022 or pursuant to the Company’s December 21, 2020 IPO
Lead Plaintiff Deadline: December 6, 2022
Opendoor was formerly known as Social Capital Hedosophia Holdings Corp. II (“SCH”) and operated as a special purpose acquisition company (“SPAC”), also called a blank-check company, which is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person.
On September 15, 2020, the Company, then still operating as SCH, and Legacy Opendoor, a private company operating as a digital platform for residential real estate, announced their entry into a definitive agreement for the Merger (the “Merger Agreement”), which valued Legacy Opendoor at an enterprise value of $4.8 billion.
On October 5, 2020, the Company filed a registration statement on Form S-4 with the SEC in connection with the Merger, which, after several amendments, was declared effective by the SEC on November 27, 2020 (the “Registration Statement”). On November 30, 2020, the Company filed a proxy statement/prospectus on Form 424B3 with the SEC in connection with the Merger, which formed part of the Registration Statement (the “Proxy” and, together with the Registration Statement, the “Offering Documents”).
On December 18, 2020, pursuant to the Merger Agreement, the Company, among other things, deregistered as a Cayman Islands company, registered as a Delaware company, changed its name to “Opendoor Technologies Inc.”, and consummated the Merger, whereby, among other things, Legacy Opendoor became a wholly owned subsidiary of the Company.
Following the Merger, the Company has operated a digital platform for buying and selling residential real estate in the U.S. The Company’s platform features a technology known as “iBuying,” which is an algorithm-based process that purportedly enables Opendoor to make accurate market-based offers to sellers for their homes, and then flip those homes to buyers for a profit.
On December 21, 2020, the Company’s post-Merger common stock and warrants began publicly trading on the Nasdaq Stock Market (“NASDAQ”) under the ticker symbols “OPEN” and “OPENW”, respectively.
On September 19, 2022, citing a review of industry data, Bloomberg reported that the Company appeared to have lost money on 42% of its transactions in August 2022 (as measured by the prices at which it bought and sold properties). Bloomberg further reported that the data was even worse in key markets such as Los Angeles, California, where Opendoor lost money on 55% of sales, and Phoenix, Arizona, where it lost money on 76% of sales. Worse, a global real estate tech strategist interviewed by Bloomberg, Mike DelPrete, predicted that, based on his analyses, September would likely be even worse for Opendoor than August. Bloomberg’s findings evidenced the failure of Opendoor’s algorithm to adjust accurately to changing market conditions.
Following the Bloomberg report, Opendoor’s stock price fell $0.50 per share, or 12,32%, over the following two trading sessions, to close at $3.56 per share on September 20, 2022 – an 88.61% decline from the Company’s first post-Merger closing stock price of $31.25 per share on December 21, 2020 (the “Initial Closing Price”).
As of the time the complaint was filed, Opendoor’s common stock was trading significantly below the Initial Closing Price and continues to trade below its initial value from the Merger, damaging investors.
According to the complaint, the Offering Documents for the Merger were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) the algorithm (“Algorithm”) used by the Company to make offers for homes could not accurately adjust to changing house prices across different market conditions and economic cycles; (ii) as a result, the Company was at an increased risk of sustaining significant and repeated losses due to residential real estate pricing fluctuations; (iii) accordingly, Defendants overstated the purported benefits and competitive advantages of the Algorithm; and (iv) as a result, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.
For more information on the Opendoor class action go to: https://bespc.com/cases/OPEN
Schmitt Industries, Inc. (NASDAQ: SMIT)
Class Period: September 1, 2020 – September 20, 2022
Lead Plaintiff Deadline: December 12, 2022
On September 20, 2022, after the market closed, Schmitt announced that its previous financial statements “should no longer be relied upon” and would require restating, estimating that “the errors were cumulatively material, resulting in an understatement of $330,203 in expenses for the first three quarters of the fiscal year.
On this news, Schmitt stock fell $0.68, or 17.9%, to close at $3.12 per share on September 21, 2022, hurting investors.
According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Schmitt Industries continuously downplayed its serious issues with internal controls; (2) Schmitt Industries’ financial statements from August 31, 2021, to the present included “certain errors”; (3) as a result, Schmitt Industries would need to restate its previously filed financial statements for certain periods; and (4) as a result, Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
For more information on the Schmitt class action go to: https://bespc.com/cases/SMIT
Block, Inc. (NYSE: SQ)
Class Period: November 4, 2021 and April 4, 2022
Lead Plaintiff Deadline: December 12, 2022
Block, formerly known as Square, Inc., is a technology company that creates financial service tools. Block’s segments include Square, which offers financial tools for sellers, and Cash App, which provides financial tools for individuals.
On April 4, 2022, Block announced that a former employee had improperly downloaded certain reports of Block’s subsidiary, Cash App Investing, on December 10, 2021. The information in the reports included full customer names and brokerage account numbers, as well as portfolio value, brokerage portfolio holdings, and/or stock trading activity. As many as 8.2 million Cash App Investing customers were affected. Prior to April 4, 2022, Block had not disclosed this information to shareholders.
On this news, Block’s stock price fell by more than 6%, damaging investors.
The Block class action lawsuit alleges that defendants throughout the Class Period failed to disclose that: (i) Block lacked adequate protocols restricting access to customer sensitive information; (ii) as a result, a former employee was able to download certain reports of Block’s subsidiary, Cash App investing, containing full customer names and brokerage account numbers, as well as brokerage portfolio value, brokerage portfolio holdings, and/or stock trading activity; and (iii) consequently, Block was reasonably likely to suffer significant damage including reputational harm.
For more information on the Block class action go to: https://bespc.com/cases/SQ
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
