IBTA Lawsuit Alert! Class Action Lawsuit Against Ibotta, Inc.

A class action lawsuit was filed against Ibotta, Inc. (IBTA) by Levi & Korsinsky on April 17, 2025. The plaintiffs (shareholders) alleged that they bought IBTA stock at artificially inflated prices during its IPO (Initial Public Offering), which was on or about April 18, 2024, and are now seeking compensation for their financial losses. Investors who bought Ibotta stock during that period can click here to learn about joining the lawsuit.

Ibotta is a technology company that operates the Ibotta Performance Network (IPN) app, which rewards customers with cash back on their purchases. Customers can avail of cash back regardless of whether they shop on their phones, computers, or in stores. Ibotta has partnered with multiple CPG (Consumer Packaged Goods) brands to offer these rewards, and according to its website, it has credited American consumers with $2 billion in cash rewards through IPN.

Importantly, Ibotta’s claims about its contract with retailer, The Kroger Company (KR), are at the heart of the current complaint.

Ibotta’s Misleading Claims

According to the lawsuit, Ibotta and two of its senior officers and six of its directors (defendants), who were involved in signing, reviewing, and/or contributed to the Registration Statement, allegedly made false and misleading claims in the statement.

Additionally, nine investment banking firms that acted as underwriters for the IPO are identified as the “Underwriter Defendants” in the complaint. Among other things, they allegedly “arranged a multi-city roadshow prior to the IPO during which they, and representatives from Ibotta, met with potential investors and presented highly favorable information about the company, its operations, and its financial prospects.”

Particularly, the defendants are accused of omitting truthful information about the risks associated with the company’s contract with The Kroger Co. from the Registration Statement. Specifically, they failed to inform investors that the contract with a large client was at-will, and Kroger could cancel it without warning.

Notably, the Registration Statement and final prospectus named several leading retail publishers as Ibotta’s partners in IPN, including Walmart (WMT), Kroger, Dollar General (DG), Shell Plc (SHEL), and others.

The Registration Statement also mentioned that Ibotta worked indirectly to publish offers on certain retailer properties, including Kroger (powering Kroger Cash) and Shell (powering Shell Fuel Rewards).

Furthermore, the Registration Statement stated that the company’s business, financial condition, and results of operations, would be affected if it failed to renew, maintain, and expand relationships with existing publishers, or to add new publishers to the IPN. Also, Ibotta’s business could be impacted if its publishers faced any business downturns, store closures, failures, or other unforeseen circumstances.

However, subsequent events (discussed below) revealed that Ibotta failed to inform investors that its contract with Kroger was at-will, meaning Kroger could cancel the contract at any time without giving adequate warning.

Plaintiffs’ Arguments

The plaintiffs maintain that the Defendants deceived investors by lying and misrepresenting critical information about the company’s business contract with Kroger during the IPO period, which induced investors to buy the stock at elevated prices in the IPO.

Moreover, none of the defendants conducted proper due diligence concerning the accuracy and veracity of the Registration Statement, according to the complaint.

The information became clear after the market closed on August 13, 2024, when the company published its Q2FY24 results. Surprisingly, Ibotta made no mention of Kroger as a client in the report, indicating that the retailer had cancelled its contract. Following the news, IBTA stock plunged 26.7% the next day.

To conclude, Ibotta allegedly made misleading representations about its contract with Kroger, leading to investor excitement about its future growth prospects. Since its IPO, IBTA shares have lost 48% of their value, causing massive damage to shareholder returns.