SAN DIEGO, CA / ACCESSWIRE / October 20, 2021 / Robbins Geller Rudman & Dowd LLP announces that purchasers or acquirers of The Honest Company, Inc. (NASDAQ:HNST) common stock pursuant and/or traceable to the registration statement and prospectus (collectively, the "Registration Statement") issued in connection with Honest Company's May 2021 initial public offering ("IPO") have until November 15, 2021 to seek appointment as lead plaintiff in Dixon v. The Honest Company, Inc., No. 21-cv-07405, the Honest Company class action lawsuit. The Honest Company class action lawsuit charges Honest Company, certain of its officers and directors, and the underwriters of the IPO with violations of the Securities Act of 1933. The Honest Company class action lawsuit was commenced on September 15, 2021 in the Central District of California. A similar lawsuit, Gambino v. The Honest Company, Inc., No. 21-cv-08033, is also pending in the Central District of California.
If you wish to serve as lead plaintiff of the Honest Company class action lawsuit, please provide your information by clicking here. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at [email protected]. Lead plaintiff motions for the Honest Company class action lawsuit must be filed with the court no later than November 15, 2021.
CASE ALLEGATIONS: The Honest Company class action lawsuit alleges that Honest Company's Registration Statement was materially false and misleading and omitted that: (i) prior to the IPO, Honest Company's results had been significantly impacted by a multimillion-dollar COVID-19 stock-up for products in its Diapers and Wipes as well as Household and Wellness product categories; (ii) at the time of the IPO, Honest Company was experiencing decelerating demand for such products; (iii) as a result, Honest Company's financial results would likely be adversely impacted; and (iv) as such, defendants' positive statements about Honest Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Approximately two months after the IPO, on August 13, 2021, Honest Company reported a net loss of $20 million for the second quarter of 2021, as compared to a net loss of only $0.4 million for the second quarter of 2020. Honest Company also disclosed that its revenue grew only 3% as compared to the second quarter of 2020, because it was negatively impacted by "an estimated $3.7 million COVID-19 stock-up impact primarily in Diapers and Wipes in the prior year period." Honest Company also disclosed that its Diapers and Wipes product category revenue declined 2% compared to the second quarter of 2020. Honest Company further disclosed that "Household and Wellness revenue declined 6% from the second quarter of 2020 as consumer and customer demand for sanitization products decreased as consumers became vaccinated and customers managed heavy levels of inventory." On this news, Honest Company's stock price fell approximately 28%, damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Honest Company common stock pursuant and/or traceable to the Registration Statement issued in connection with the IPO to seek appointment as lead plaintiff in the Honest Company class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Honest Company class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Honest Company class action lawsuit. An investor's ability to share in any potential future recovery of the Honest Company class action lawsuit is not dependent upon serving as lead plaintiff.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever - $7.2 billion - in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs' firm. Please visit https://www.rgrdlaw.com/firm.html for more information.
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J.C. Sanchez, 800-449-4900
SOURCE: Robbins Geller Rudman & Dowd LLP