LifeStance Health Group (LFST) IPO $50M Shareholder Settlement

LifeStance Health Group settles $50 million with shareholders to end claims over IPO in 2021.

On August 11, 2021, LifeStance published its financial results which reported a $70 million net loss and issued Q3 guidance that was below previous estimates.

On August 12, LifeStance's stock price fell 46% and closed at $11.71 per share.

During the COVID-19 pandemic, LifeStance benefitted from the state and local lockdown orders. Total revenue grew from $100.3 million in 2018 to $377.2 million in 2020 on a pro forma basis.

Back on June 11, 2021, when LifeStance filed the final Prospectus for the IPO, the shares were priced at $18.00. In its IPO documentation, LifeStance did not inform prospective investors of the negative impact on the company’s business of lifting the COVID restrictions, which increased operating expenses with fewer online and more in-person patient visits, and increased costs of onboarding new physicians.

Investors have not recovered their losses, the stock is still trading in the $5-$11 range in 2022, a drop from the IPO price of $18.