OTRK - Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Ontrak Inc. (OTRK)
NEW YORK, March 04, 2021 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Ontrak, Inc. (“Ontrak”) (NASDAQ: OTRK) in the United States District Court for the Central District of California on behalf of those who purchased or acquired the securities of Ontrak between November 5, 2020 and February 26, 2021, inclusive (the “Class Period”). The lawsuit seeks to recover damages for investors under the federal securities laws.
On March 1, 2021, Ontrak issued a press release announcing preliminary financial results for fourth quarter and full year 2020. The Company stated that its largest customer had terminated its contract with Ontrak, effective June 26, 2021. The Company also stated that this customer “evaluated Ontrak on a provider basis” and “[a]s such, the customer evaluated [Ontrak’s] performance based on [its] ability to achieve the lowest possible cost per medical visit, and not on [its] clinical outcomes data or medical cost savings.” The Company further stated that “the coaching model which Ontrak has pioneered for over a decade was seen by the customer to be less relevant to their performance metrics.” On this news, the Company’s share price fell $27.32, or more than 46%, to close at $31.62 per share on March 1, 2021, thereby injuring investors.
The Complaint alleges that Defendants failed to disclose to investors: (i) that Ontrak’s largest customer evaluated the Company on a provider basis, valuing Ontrak’s performance based on achieving the lowest cost per medical visit rather than clinical outcomes or medical cost savings; (ii) that, as a result, Ontrak’s largest customer did not find the Company’s program to be effective and was reasonably likely to terminate its contract with Ontrak; (iii) that, because this customer accounted for a significant portion of the Company’s revenue, the loss of the customer would have an outsized impact on Ontrak’s financial results; and (iv) 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.
Investors who purchased or otherwise acquired shares of Ontrak during the Class Period should contact the Firm prior to the May 3, 2021 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com .
Please visit our website at http://www.gme-law.com for more information about the firm.