InnovAge Holding Corp.
InnovAge Holding Corp. (“InnovAge” or the “Company”) is a healthcare company that delivers care primarily to senior citizens through its subsidiary InnovAge Platform. In March 2021, InnovAge completed its IPO, selling approximately 18,995,901 shares of common stock at a price of $21.00 per share.
On September 21, 2021, after the market closed, InnovAge revealed that the Centers for Medicare and Medicaid Services (“CMS”) 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 Company’s stock price fell $2.90 per share, or 25%, to close at $8.75 per share on September 22, 2021, on unusually heavy trading volume.
By the commencement of this action, the Company’s stock was trading as low as $6.61 per share, a nearly 69% decline from the $21 per share IPO price.
A securities class action has been filed against InnovAge on behalf of shareholders that purchased InnovAge shares between March 5, 2021 through September 21, 2021. This case has been filed in the U.S. District Court for the District of Colorado.
The complaint filed in this class action alleges that Defendants failed to disclose to investors: (1) that certain of InnovAge’s facilities failed to provide covered services, provide accessible and adequate services, manage participants’ medical situations, and oversee use of specialists; (2) that, as a result, the Company was reasonably likely to be subject to regulatory scrutiny, including by the Centers for Medicare and Medicaid Services; (3) that, as a result, there as a significant risk that CMS would suspend new enrollments pending an audit of the Company’s services; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
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