On March 15, 2023, after the market closed, LivePerson, Inc. (NASDAQ: LPSN) reported disappointing fourth-quarter earnings results as Medicare suspended reimbursements to one of LivePerson’s subsidiaries “pending further governmental review.”
Following the unexpected drop in revenue, LivePerson’s stock price dropped 57% on March 16, 2023, causing significant harm to investors.
Why is LPSN stock dropping?
On Thursday, March 16, 2023, shares of customer service technology company LivePerson, Inc. dropped after the company published its fourth-quarter earnings results, showing both a revenue decline and earnings miss. The Company also disclosed that Medicare suspended reimbursements for WildHealth, one of its subsidiaries, “pending further governmental review.” LivePerson stated “[w]hile the Company currently believes that the services rendered under the Program in the fourth quarter of 2022 were valid, in view of the inherent uncertainty as to the timing and amount of further reimbursement for services rendered under the Program, the Company has elected to take a reserve for revenue associated with services delivered under the Program in the fourth quarter of 2022 for which payment has not been collected.”
Previously, on February 28, 2023, the day before the company was supposed to file its fourth-quarter earnings results, LivePerson filed an extension with the SEC to delay its 10-K report until March 16, 2023. LivePerson stated the reason for the delay was related to its acquisition of precision healthcare company WildHealth for $22 million last year and said it needed to conduct additional review of revenue recognition.
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