LPRO ALERT: Kirby McInerney LLP Announces the Filing of a Securities Class Action on Behalf of Open Lending Corporation Investors

/EIN News/ -- NEW YORK, May 05, 2025 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Western District of Texas on behalf of those who acquired Open Lending Corporation (“Open Lending” or the “Company”) (NASDAQ:LPRO) securities during the period from February 24, 2022, through March 31, 2025 (“the Class Period”). Investors have until June 30, 2025, to apply to the Court to be appointed as lead plaintiff in the lawsuit.

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On March 17, 2025, before the market opened, Open Lending disclosed that it would be unable to timely file its Annual Report for 2024 as it “require[d] additional time to finalize its accounting and review processes specifically related to its profit share revenue and related contract assets.” On this news, the price of Open Lending shares declined by $0.40 per share, from $4.31 per share on March 14, 2025, to close at $3.91 on March 17, 2025.

Then, on March 31, 2025, Open Lending released its fourth quarter and full year 2024 financial results, revealing quarterly revenue of negative $56.9 million due in part to “a $81.3 million reduction in estimated profit share revenues related to business in historic vintages …primarily due to heightened delinquencies and corresponding defaults associated with loans originated in 2021 through 2024.” The Company identified “three factors primarily contributed to this reduction of estimated profit share.” First, a “deterioration of the Company’s 2021 and 2022 vintages” resulting in loans which were “worth significantly less than their corresponding outstanding loan balances.” This factor accounted for “approximately 40% of the Company’s total negative change.” Second, the Company “identified two cohorts of borrowers, borrowers with credit builder tradelines and borrowers with fewer positive tradelines, that caused its 2023 and 2024 vintages to underperform.” This factor “accounted for approximately 40% of the Company’s total negative change.” Third, the Company revealed “continued elevated delinquencies and ultimate defaults” which “accounted for approximately 20% of the Company’s total negative change.” Additionally, the Company disclosed a net loss of $144 million, due to the Company being “negatively impacted by the recording of a valuation allowance on [its] deferred tax assets of $86.1 million, which increased [its] income tax expense during the period.

In a separate press release on the same day, Open Lending also announced that it had appointed a new Chief Executive Officer and a new Chief Operating Officer, effective immediately, both of whom would be replacing Charles D. Jehl, who had been operating as the Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer simultaneously. On this news, the price of Open Lending shares declined by $1.59 per share, or approximately 57%, from $2.76 per share on March 31, 2025, to close at $1.17 on April 1, 2025.

The complaint alleges that, throughout the Class Period, defendants: (1) misrepresented the capabilities of the Company’s risk-based pricing models; (2) issued materially misleading statements regarding the Company’s profit share revenue; (3) failed to disclose the Company’s 2021 and 2022 vintage loans had become worth significantly less than their corresponding outstanding loan balances; (4) misrepresented the underperformance of the Company’s 2023 and 2024 vintage loans.

If you purchased or otherwise acquired Open Lending securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or fill out the contact form below, to discuss your rights or interests with respect to these matters without any cost to you.

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Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com