Green Dot Corporation

On February 20, 2019, Green Dot CEO Steven W. Streit revealed during the FY 2018 conference call that the Company’s strategy of attracting “high-value” long-term customers at the expense of “one and done” customers was self-sabotaging, stating, “…that we are somewhat a victim of our own success in converting more and more of our quarterly active accounts to direct deposit active accounts.” These “one and done” customers represented a significant source of revenue in the Company’s legacy segment.

On this news, Green Dot’s share price fell $7.47 per share, or nearly 10%, to close at $67.20 per share on February 21, 2019, thereby injuring investors.

Then, on May 8, 2019, the Company disclosed a large “investment in growth for the purpose of aggressively marketing new products.”

On this news, Green Dot’s share price fell $16.71 per share, or nearly 26%, to close at $46.56 per share on May 9, 2019, thereby injuring investors further.

Then, on August 7, 2019, Green Dot reported an “accelerated loss of unit sales in [its] prepaid product lines, resulting in lower active accounts from both non-reloading customers and cash reloading customers.

On this news, Green Dot’s share price fell $19.84 per share, or nearly 41%, to close at $27.42 per share on August 8, 2019, thereby injuring investors further.

Finally, on November 7, 2019, the Company revealed a decline of 620,000 accounts in its active consumer business, mostly “one-time use accounts.” 

On this news, Green Dot’s share price fell $5.41 per share, or nearly 18%, to close at $24.54 per share on November 8, 2019, thereby injuring investors further.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Green Dot’s strategy to attract “high-value” long-term customers was at the expense of “one and done” customers; (2) that Green Dot’s “one and done” customers represented a significant source of revenues in its legacy segment; (3) that, consequently, Green Dot’s strategy was self-sabotaging; and (4) that, as a result of the foregoing, Defendants’ statements about its business and operations were materially false and misleading at all relevant times.