InnovAge Holdings Corp. (INNV) May Have Misstated its Operational and Business Prospects in its Initial Public Offering Documents
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired InnovAge Holdings Corp. (NASDAQ: INNV ) securities pursuant to the Company’s March 2021 initial public offering (“IPO”) for violations of the Securities Act of 1933. InnovAge operates a healthcare delivery platform that purports to take a “patient-centered care approach” to improve the quality of care that participants receive.
According to the complaint, on March 5, 2021, InnovAge conducted its IPO, selling its shares at $21.00 per share for proceeds of approximately $373.6 million. On September 21, 2021, InnovAge revealed that the Centers for Medicare and Medicaid Services had “determined to freeze new enrollments at [the Company’s] Sacramento center based on “deficiencies detected in [a recent] audit.” It stated that these “deficiencies relate to failures to provide covered services, provide accessible and adequate services, manage participants’ medical situations, and oversee use of specialists, among others.” On this news, the stock price fell $2.90 per share, or 25%, to close at $8.75 per share on September 22, 2021. The stock now trades below $9.00 per share, a significant decline from the $21 per share IPO price.
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