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LPRO.US
id: 1582
Open Lending ($LPRO) Profit Share Collapse and Loan Default Misstatements
Investors can submit applications for the lead plaintiff role.
W.D. Texas
Court1:25-cv-00650
Case number02/24/2022
Class period Start03/31/2025
Class period End06/30/2025
Lead Plaintiff motion deadline- $LPRO investors filed a claim against Open Lending for misstating revenue tied to loan performance and failing to disclose growing credit risk in its insured auto loan vintages.
- After reporting a $144 million quarterly loss and a massive revenue restatement, $LPRO dropped 57.6% on April 1, 2025.
Case Details:
Between February 24, 2022 and March 31, 2025, Open Lending promoted its flagship “Lenders Protection” platform as a data-driven solution for auto lenders. The company claimed its risk-based pricing model accurately predicted default rates and supported growing profit-sharing revenue. Management assured investors that loan vintages were performing well and that the company had strong forecasting controls in place.
But on March 17, 2025, Open Lending disclosed it would delay its 2024 annual report due to problems reviewing profit share revenue and contract assets. Then, on March 31, 2025, the company revealed its Q4 2024 revenue was negative $56.9 million and it had to reduce profit share estimates by $81.3 million—leading to a net loss of $144 million for the quarter.
The company admitted its 2021–2024 loan vintages were underperforming, largely due to rising delinquencies, declining used car values, and flawed borrower credit assumptions. Executives also disclosed that two borrower segments—those with credit builder tradelines and thin credit histories—were driving much higher default rates than previously estimated.
Following the announcement, $LPRO stock fell 57.6% on April 1, 2025.
Based on these events, $LPRO investors filed a claim against Open Lending, accusing the company of the following:
- It misrepresented the accuracy of their risk-based pricing model and profit share forecasting.
- It failed to disclose deteriorating loan performance and misleadingly reported inflated revenue based on flawed assumptions.
Considering all the representations, investors believe Open Lending concealed mounting credit risk and profit-share exposure to maintain stock value.
Case Status
Lead Plaintiff Submission
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
03/31/2025
Filing date
05/01/2025
Lead Plaintiff Deadline
06/30/2025