Shareholder Investigation of Ra Medical Systems
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Ra Medical Systems, Inc. (RMED) Misled Shareholders
According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1933 pursuant to its September 2018 initial public offering (“IPO”), Ra Medical Systems, Inc. (RMED) held its IPO and received approximately $67.6 million in proceeds. The proceeds from the IPO were purportedly to be used for expansion of its direct sales force and marketing of its products; clinical studies for new products and product enhancements; and other research and development activities, working capital, and general corporate purposes. However, in March 2019, Ra Medical revealed that its financial results were negatively impacted by issues related to the hiring and training of qualified sales personnel as well as production limitations. On this news, Ra Medical’s stock fell over 30% to close at $4.43 per share on March 15, 2019. As of June 11, 2019, Ra Medical was trading at $3.09, an over 80% decline from its IPO price.