Ready Capital Corporation

On March 3, 2025, before the market opened, Ready Capital announced its fourth quarter and full year 2024 financial results, reporting fourth quarter 2024 net loss of $1.80 per share and full year 2024 net loss of $2.52 per share. The Company explained had to take “decisive actions to stabilize” its “balance sheet going forward by fully reserving for all of our nonperforming loans in our CRE portfolio.” This included, among other actions, taking $284 million in combined Current Expected Credit Loss (“CECL”) and valuation allowances in order to mark the Company’s non-performing loans to current values. The Company further revealed that its total leverage increased to “3.8x,” up from the prior quarter’s total leverage of “3.3x.”

On this news, Ready Capital’s stock price fell $1.86, or 26.8%, to close at $5.07 per share on March 3, 2025, on unusually heavy trading volume.

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 significant non-performing loans in its CRE portfolio were not likely to be collectible; (2) that Ready Capital would fully reserve these problem loans in order to “stabilize” its CRE portfolio; (3) that this was not accurately reflected in Ready Capital’s current expected credit loss or valuation allowances; (4) that, as a result, the Company’s financial results would be adversely affected; and (5) 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.