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Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Athira, Home Point, Rocket, and Rekor and Encourages Investors to Contact the Firm

NEW YORK, July 21, 2021 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Athira Pharma, Inc. (NASDAQ:ATHA), Home Point Capital, Inc. (NASDAQ:HMPT), Rocket Companies, Inc. (NYSE:RKT), and Rekor Systems, Inc. (NASDAQ:REKR). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.

Athira Pharma, Inc. (NASDAQ:ATHA)

Class Period: September 2020 IPO

Lead Plaintiff Deadline: August 24, 2021

On June 17, 2021, after the market closed, Athira announced that it had placed its president and Chief Executive Officer, Dr. Leen Kawas (“Kawas”), on leave pending a review of actions stemming from doctoral research she conducted while at Washington State University (“WSU”).

The same day, STAT published an article stating that WSU was investigating claims that Dr. Kawas “published several papers containing altered images while she was a graduate student.” These papers “are foundational to Athira’s efforts to treat Alzheimer’s” because they “established that a particular
molecule affects the activity of HGF.” Though Athira is developing a different molecule than the one Kawas examined in the papers at issue, her “doctoral work laid the biological groundwork that Athira continues to use in their approach to treating Alzheimer’s.”

On this news, the Company’s share price fell $7.09, or approximately 39%, to close at $11.15 per share on June 18, 2021.

According to the Complaint, the Company made false and misleading statements to the market. Research performed by Athira CEO and President Leen Kawas was tainted by scientific misconduct. Kawas allegedly engaged in the manipulation of key data in the research through the manipulation of Western blot images. The tainted research was of critical importance to the Company’s efforts to develop treatments for Alzheimer’s. The Company’s research and development efforts were based on invalid data. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Athira, investors suffered damages.

For more information on the Athira class action go to: https://bespc.com/cases/ATHA

Home Point Capital, Inc. (NASDAQ:HMPT)

Class Period: January 29, 2021 IPO

Lead Plaintiff Deadline: August 20, 2021

On January 29, 2021, Home Point Capital launched its IPO, issuing 7.25 million shares of Home Point Capital’s common stock to the public at the offering price of $13.00 per share. Net proceeds of the offering were approximately $88 million.

On May 6, 2021, Home Point Capital issued a press release announcing Home Point Capital’s financial results for the first quarter of 2021. Among other results, Home Point Capital reported revenue of $324.2 million, missing consensus estimates by $41.72 million. On this news, Home Point Capital’s stock price fell nearly 18%, closing at $7.70 per share.

According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Home Point’s aggressive expansion of its broker partners would dramatically increase Home Point’s expenses; (2) the mortgage industry was anticipating industry-wide decreased gain-on-sale margins as a result of rising interest rates in 2021 and Home Point would be subject to the same competitive pressures; (3) accordingly, Home Point had overstated its business and financial prospects; and (4) as a result, the Offering Documents were materially false and/or misleading and failed to state information required to be stated therein. When the true details entered the market, the lawsuit claims that investors suffered damages.

For more information on the Home Point class action go to: https://bespc.com/cases/HMPT

Rocket Companies, Inc. (NYSE:RKT)

Class Period: February 25, 2021 to May 5, 2021

Lead Plaintiff Deadline: August 30, 2021

On May 5, 2021, Rocket Companies reported that it was on track to achieve closed loan volume within a range of only $82.5 billion and $87.5 billion and gain on sale margins within a range of only 2.65% to 2.95% for the second quarter of 2021. At the mid-point, this gain on sale margin estimate equated to a 239 basis point decline year-over-year and a 94 basis point decline sequentially, which represented Rocket Companies’ lowest quarterly gain on sale margin in two years. The stunning collapse in Rocket Companies’ gain on sale margin reflected the fact that the favorable market conditions purportedly being experienced by Rocket Companies during the Class Period had in fact reversed. During a conference call to explain the results, Rocket Companies’ Chief Financial Officer and Treasurer, defendant Julie R. Booth, revealed that the sharp decline in quarterly gain on sale margin was being caused by three factors: (i) pressure on loan pricing; (ii) a product mix shift to Rocket Companies’ lower margin Partner Network segment; and (iii) a compression in price spreads between the primary and secondary mortgage markets. Defendant Booth also admitted that certain of these trends began “at the end of Q1.” 

On this news, the price of Rocket Companies Class A common stock fell by nearly 17% to close at $19.01 per share. 

As the market continued to digest the news in the days that followed, the price of Rocket Companies Class A common stock continued to decline, falling to a low of just $16.48 per share by May 11, 2021.

The Rocket Companies class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) Rocket Companies’ gain on sale margins were contracting at the highest rate in two years as a result of increased competition among mortgage lenders, an unfavorable shift toward the lower margin Partner Network operating segment and compression in the price spread between the primary and secondary mortgage markets; (ii) Rocket Companies was engaged in a price war and battle for market share with its primary competitors in the wholesale market, which was further compressing margins in Rocket Companies’ Partner Network operating segment; (iii) the adverse trends identified above were accelerating and, as a result, Rocket Companies’ gain on sale margins were on track to plummet at least 140 basis points in the first six months of 2021; (iv) as a result, the favorable market conditions that had preceded the Class Period and allowed Rocket Companies to achieve historically high gain on sale margins had vanished as Rocket Companies’ gain on sale margins had returned to levels not seen since the first quarter of 2019; (v) rather than remaining elevated due to surging demand, Rocket Companies’ company-wide gain-on-sale margins had fallen materially below pre-pandemic averages; and (vi) consequently, defendants’ positive statements about Rocket Companies’ business operations and prospects were materially misleading and/or lacked a reasonable basis.

For more information on the Rocket class action go to: https://bespc.com/cases/RKT

Rekor Systems, Inc. (NASDAQ:REKR)

Class Period: April 12, 2019 to May 25, 2021

Lead Plaintiff Deadline: August 30, 2021

On May 10, 2021, a bill authorizing the establishment of a state UVED program was excluded from the Texas Legislature’s Daily House Calendar and left pending in a state committee. Because May 10, 2021 was the deadline for the Texas UVED bill to move from the committee, news sources reported significant market speculation that the bill was dead. Further, on a post-market earnings call that same day to discuss Rekor’s first quarter 2021 financial results, Defendant Berman also indicated that Rekor may not secure a UVED agreement with Texas.

On news of the Texas UVED bill’s exclusion from the Texas Legislature’s Daily House Calendar, Rekor’s stock price fell $5.20 per share, or 27.5%, to close at $13.71 per share on May 10, 2021. Then, following Defendants’ post-market conference call with investors the same day, Rekor’s stock price fell an additional $2.45 per share, or 17.87%, to close at $11.26 per share on May 11, 2021—representing a two-day total decline of $7.65 per share, or 40.45%.

Then, on May 26, 2021, private investor Western Edge published a report addressing Rekor, entitled “Rekor Systems: Lackluster Growth Runway And Exaggerated Insurance Scheme Raise Substantial Downside Risk.” The Western Edge report alleged, among other things, that global competition was “miles ahead” of Rekor in ALPR development and market establishment; that the Company’s “realized results suggest management’s potential revenue guidance could be overstated by up to 80%”; and that investors were at risk of facing a “massive downside if [the Company’s] growth doesn’t show up.” The Western Edge report also noted that Rekor’s predecessor in the Oklahoma UVED partnership had exited it because “the program is not economically feasible” given costs associated with the program and because “there was typically no consequences for individuals that simply ignored the fines/insurance requirements after they were identified.”

Also on May 26, 2021, Mariner Research Group (“Mariner”) published a report addressing Rekor, entitled “REKR – Government documents do not support investor expectations.” The Mariner report “highlight[ed] government documentation which shows that REKR’s revenue opportunities are likely a fraction of what investors expect[.]” Among other things, Mariner alleged that “Oklahoma government budgets imply that REKR’s much-vaunted UVED program is a sub $2MM revenue opportunity—almost 96% less than the >$40MM in revenue intimated by Rekor’s CEO.” The Mariner report likewise echoed the issues disclosed in the Western Edge report, including, inter alia, those that had caused Rekor’s predecessor in the Oklahoma UVED partnership to exit the program.

Following the publication of the Western Edge and Mariner reports, Rekor’s stock price fell $0.44 per share, or 3.93%, to close at $10.77 per share on May 26, 2021.

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Rekor’s ALPR technology and UVED-related business is outclassed by global competitors with an established, dominant market share; (ii) it was unlikely that states would pass legislation authorizing deals similar to Rekor’s Oklahoma UVED partnership because of, inter alia, state and local privacy laws and related public concerns; (iii) Rekor’s UVED partnership was not as profitable as Defendants had led investors to believe because of known impediments to enrollment rates and costs associated with the partnership; (iv) accordingly, Rekor had overstated its potential revenues, profitability, and overall ALPR- and UVED-related business prospects; and (v) as a result, the Company’s public statements were materially false and misleading at all relevant times.

For more information on the Rekor class action go to: https://bespc.com/cases/REKR

About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com

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