An investor, who purchased shares of EverQuote, Inc. (NASDAQ: EVER), filed a lawsuit over alleged violations of Securities Laws by EverQuote, Inc. in connection with certain allegedly false and misleading statements made in connection with EverQuote’s June 2018 initial public offering (“IPO”).
Cambridge, MA based EverQuote, Inc. operates an online marketplace for insurance shopping in the United States. On or about June 18, 2018, EverQuote, Inc sold 4.69 million shares of stock in its initial public stock offering (the IPO ), at $18 a share raising $84,375,000 in new capital. In August 2018, EverQuote’s pubic earnings report revealed that second quarter 2018 quote request volume had worsened to a year-over-year growth rate of only 2.3% and, moreover, to a quarterly decline of 12%. Then, in November 2018, EverQuote revealed dramatically worse third quarter 2018 results. Among other things, quote request volume had worsened into not only zero growth, but in fact had declined 6% year-over-year. Shares of EverQuote, Inc. (NASDAQ: EVER) declined to as low as $4.05 per share in late December 2018.
According to the complaint the plaintiff alleges that the defendants violated Securities Laws. More specifically, the plaintiff claims that the Registration Statement that was filed in connection with EverQuote’s June 2018 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. Among other things, the plaintiff alleges that the Registration Statement touted the Company’s year-over-year and quarterly increases in both revenue and quote request volume and touted a trend of exponential yearly growth in quote request volume.