Wolf Haldenstein Adler Freeman & Herz LLP announces that a federal securities class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors who purchased or otherwise acquired LifeStance Health Group, Inc. common stock issued in connection with LifeStance Health’s June 10, 2021 initial public stock offering (the “IPO”).
All investors who purchased the shares of LifeStance Health Group, Inc. and incurred losses are urged to contact the firm immediately at classmember@whafh.com or (800) 575-0735 or (212) 545-4774.
If you have incurred losses in the shares of LifeStance Health Group, Inc., you may, no later than October 11, 2022, request that the Court appoint you lead plaintiff of the proposed class. Please contact Wolf Haldenstein to learn more about your rights as an investor in the shares of LifeStance Health Group, Inc.
LifeStance is one of the nation’s largest providers of virtual and in-person outpatient mental health care. At the time of its IPO, the Company operated 370 centers and employed 3,300 psychiatrists, advanced practice nurses, psychologists, and therapists across 27 states. The Company provides virtual and in-person outpatient mental health care for children, adolescents, and adults experiencing a variety of mental health conditions including depression, anxiety disorder, schizophrenia, and post-traumatic stress disorder.
Due to Covid lockdowns, total patient visits increased from 1,353,285 in 2019 to 2,290,728 in 2020. Meanwhile, the Company’s total revenue grew from $212.5 million in 2019 to $377.2 million in 2020 on a pro forma basis.
The approval and introduction of Covid vaccines beginning in December 2021 increased demand for in-person services and fewer patients would be seeking virtual care. In-patient services are also inherently more expensive as they require office space, etc. Many physicians were also burned out at this point and were resigning, resulting in a shortage and a need for new physicians to be hired and trained, increasing costs.
On February 16, 2021, LifeStance filed a Registration Statement on Form S-1, which, after several amendments made pursuant to comments from the SEC, would later be utilized for the IPO. Initially, the defendants stated they intended to sell a total of 40 million shares at a price range of between $15.00 and $17.00 per share, however, based on the defendants’ strong marketing efforts to sell the IPO, they were able to price the shares sold in the IPO at $18.00 per share and to sell 46 million shares in the IPO. In the Registration Statement, the Company highlighted its aforementioned growth numbers while claiming it currently had exciting growth opportunities on its horizon. It then claimed that Covid had had no material impact on its business, instead pointing to decreased stigmatization of mental health, though it allowed that the pandemic had shown a “spotlight” on mental health that would cause its business to continue to increase.
On August 11, 2021, less than two months after the IPO, LifeStance announced its second quarter 2021 (“2Q21”) financial results for the period ended June 30, 2021 disclosing a net loss of $70 million, compared to net loss of just $27.6 million for the period from April 1, 2020 to May 14, 2020 (Predecessor) and $4.3 million for the period from April 13, 2020 to June 30, 2020 (Successor). The company also now disclosed a decrease in its clinician retention levels.
On November 8, 2021, the Company reported its third quarter 2021 results, announcing that its clinician retention had “stabilized” at around 80%. Defendants reported LifeStance’s fiscal 2021 results on March 10, 2022, and during a conference call with investors admitted that a recent Stanford study had shown that 75% of patients prefer in-person treatment. It also said that it would be reducing its number of brick and mortar facilities that it was planning on building to increase profitability.
LifeStance common stock currently trades at $8.11 per share, over 50% below the IPO price of $18.00 per share.
Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions regarding your rights and interests in this case, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735, via e-mail at classmember@whafh.com, or visit our website at www.whafh.com.
Contact:
Wolf Haldenstein Adler Freeman & Herz LLP
Patrick Donovan, Esq.
Gregory Stone, Director of Case and Financial Analysis
Email: gstone@whafh.com, donovan@whafh.com or classmember@whafh.com
Tel: (800) 575-0735 or (212) 545-4774
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