PHILADELPHIA, PA / ACCESSWIRE / November 29, 2022 / Berger Montague advises investors that a securities fraud class action lawsuit has been filed against Rent the Runway, Inc. ("RTR") (NASDAQ: RENT) on behalf of those who purchased Class A common stock issued in connection with RTR's October 2021 initial public offering (the "IPO").
Investor Deadline: Investors who purchased or acquired RTR Class A common stock may, no later than January 13, 2023, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation, please contact Berger Montague: James Maro at [email protected] or (215) 875-3093, or Andrew Abramowitz at [email protected] or (215) 875-3015 or visit: https://investigations.bergermontague.com/rent-the-runway/
RTR is an e-commerce platform that allows users to rent, subscribe, or buy designer apparel and accessories. RTR offers high-end apparel such as evening wear and accessories, as well as more causal and mixed-use items such as ready-to-wear, workwear, denim, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, ski wear, home goods, and kidswear. RTR sources its products from over 750 luxury brand partners.
On October 4, 2021, RTR filed with the SEC a registration statement on a Form S-1 for the IPO, which, after several amendments, was declared effective on October 26, 2021 (the "Registration Statement"). On October 27, 2021, RTR filed with the SEC a prospectus for the IPO on a Form 424B4, which incorporated and formed part of the Registration Statement (the "Prospectus"). The Registration Statement and Prospectus were used to sell to the investing public 17 million shares of RTR Class A common stock at $21 per share for $357 million in gross offering proceeds.
According to the complaint, RTR failed to disclose in its Registration Statement and Prospectus the following adverse facts that existed at the time of the IPO: (a) RTR was continuing to face extraordinary business headwinds, such as transportation headwinds and labor wage rate increases, from the COVID-19 pandemic; (b) RTR's active subscriber enrollments had sharply decelerated from the growth trajectory represented in the Registration Statement and, as a result, RTR was several months away from approaching its pre-pandemic levels of active subscriptions; (c) RTR needed to substantially increase marketing and advertising costs from historical figures in order to attempt to grow its active subscriber network; (d) RTR was suffering from ballooning fulfillment and transportation costs; and (e) as a result of the above, RTR was suffering accelerating operational losses at the time of the IPO and was far less likely to achieve profitability in the near term, if ever, than represented.
At the time the complaint was filed, RTR's stock traded below $2 per share, or over 90% below the IPO price.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the Court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Berger Montague, with offices in Philadelphia, Minneapolis, Washington, D.C., and San Diego, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for over five decades and serves as lead counsel in courts throughout the United States.
James Maro, Senior Counsel
Andrew Abramowitz, Senior Counsel
SOURCE: Berger Montague