Bragar Eagel & Squire, P.C. announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of all persons or entities who acquired Inovalon Holdings, Inc. (NASDAQ: INOV) Class A common stock pursuant or traceable to the Registration Statement and Prospectus (collectively, the “Registration Statement”) issued in connection with Inovalon’s February 12, 2015 initial public offering (“IPO”).
Inovalon provides cloud-based data analytics platforms for health insurance plans, pharmaceutical companies, researchers and others in the healthcare industry.
On or about February 12, 2015, Inovalon issued over 25 million shares of common stock at $27 per share, raising more than $684 million in gross proceeds.
The lawsuit alleges that the Registration Statement issued in connection with the IPO contained untrue statements of material fact and omitted to state material facts both required by governing regulations and necessary to make the statements made not misleading. Specifically, defendants failed to disclose that Inovalon derives substantial revenues from sales in the City of New York and the State of New York, both of which were reforming their corporate tax schemes in order to capture more taxes from out-of-state businesses like Inovalon doing substantial business within their borders. Those corporate tax rate increases, which would take effect January 1, 2015, more than a month prior to Inovalon’s IPO, significantly increased the company’s effective tax rate and thus lowered its 2015 earning potential. These material facts should have been disclosed in the Registration Statement, but were not, and the omission rendered false and misleading the Registration Statement’s express claim that Inovalon’s year-over-year “effective income tax rate . . . remained relatively stable at 39%.”
As the market learned the truth following the IPO, the price of Inovalon common stock declined significantly. At the time of the filing of the lawsuit, Inovalon shares were trading at less than $18 per share, or more than 33% below the IPO price.
If you acquired Inovalon Class A common stock pursuant or traceable to the Registration Statement issued in connection with the IPO, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters please contact J. Brandon Walker, Esq. by email at firstname.lastname@example.org, or telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
Bragar Eagel & Squire, P.C. is a New York-based law firm concentrating in commercial and securities litigation. For additional information, please go to www.bespc.com.
J. Brandon Walker, Esq., (212) 355-4648