LFST Shareholder Notification: Robbins LLP Reminds Investors of Lead Plaintiff Deadline in Class Action Against LifeStance Health Group, Inc. (LFST)

SAN DIEGO, Aug. 17, 2022 (GLOBE NEWSWIRE) --

The Class: Shareholder rights law firm Robbins LLP reminds investors that a shareholder filed a class action on behalf of all purchasers of the common stock LifeStance Health Group, Inc. (NASDAQ: LFST) pursuant to or traceable to the Company's June 2021 initial public offering ("IPO"), for violations of the Securities Act of 1933.  LifeStance, through its subsidiaries, provides outpatient mental health services in 31 states.

If you would like more information about LifeStance Health Group, Inc.'s misconduct, click here.

What is this Case About: LifeStance Health Group, Inc. (LFST) Filed a Negligently Prepared and Misleading Registration Statement with the SEC in support of its IPO

According to the complaint, defendants sold 46 million shares in the Company's IPO for $18.00 per share. The Registration Statement detailed the Company's historical revenue growth and profitability, and represented that the virtual side of the Company's business would continue to grow.

Despite assurances of the Company's growth potential, defendants failed to disclose that virtual client visits were decreasing as COVID-19 lockdowns were being lifted, thereby flatlining the Company's out-patient/virtual revenue growth, and that in-person visits were increasing causing the Company's operating expenses to increase substantially. Further, LifeStance had lost a large number of physicians due to burn-out and, as a result, its physician retention rate had fallen significantly below the 87% highlighted in the Registration Statement requiring additional costs to onboard new physicians. Based on the foregoing, LifeStance's business metrics and financial prospects were not as strong as the Registration Statement represented.

On August 11, 2021, less than two months after the IPO, LifeStance announced disappointing second quarter 2021 (“2Q21”) financial results for the period ended June 30, 2021, disclosing a net loss of $70 million. Critically, during the 2Q21, the Company’s operating expenses had more than tripled. Defendants also disclosed on August 11, 2021 that the Company had experienced a significant, negative “recent change in clinician retention levels” during the 2Q21.

On November 8, 2021, the Company reported its third quarter 2021 results, now explaining that “[c]linician retention [had] stabilized to approximately 80% annualized in the third quarter.” Defendants further lamented that LifeStance was also having to increase spending on “enhanced clinician engagement and continued support for workplace and work-life flexibility,” i.e. lowering physician productivity, in order to keep its existing physicians.

Defendants reported LifeStance’s fiscal 2021 results on March 10, 2022, admitting that three quarters of mental health patients prefer in-person services and that “[t]hrough 2021, our telehealth mix trended downward to the low 80s, and we expect that mix to be approximately 50-50 virtual versus in-person over the long term.” Notably, the Company stated that it would be reducing the number of brick & mortar facilities that it would be building in the immediate future expressly in order to increase its profitability.

At the time of the filing of this Complaint, LifeStance common stock trades in a range of $4.77-$7.70, a reduction of upwards of 73% from the price the shares were sold at in the IPO.

Next Steps: If you acquired shares of LifeStance Health Group, Inc. pursuant to the Company's IPO, you have until October 11, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.

All representation is on a contingency fee basis. Shareholders pay no fees or expenses.

Contact us to learn more:

Aaron Dumas
(800) 350-6003
[email protected]
Shareholder Information Form

About Robbins LLP: A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. To be notified if a class action against LifeStance Health Group, Inc. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.

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