SAN FRANCISCO, CA / ACCESSWIRE / November 30, 2022 / Hagens Berman urges Rent the Runway, Inc. (NASDAQ:RENT) investors who suffered significant losses to submit your losses now.
Defined Class: Purchasers in Rent the Runway Inc.'s October 27, 2021 IPO
Lead Plaintiff Deadline: Jan. 13, 2023
Contact An Attorney Now: [email protected]
Rent the Runway, Inc. (NASDAQ:RENT) Securities Class Action:
The class action has been filed on behalf of investors who purchased Rent the Runway shares in or traceable to the company's Oct. 27, 2021 initial public offering ("IPO") of 17 million shares at $21/share.
Specifically, leading up to Rent the Runway's IPO, the company claimed that it was experiencing a business resurgence as concerns about the COVID-19 pandemic eased, lockdown orders ceased, and its customers engaged in more social outings.
However, according to the complaint, the IPO's offering documents failed to disclose: (1) Rent the Runway was continuing to face extraordinary business headwinds, such as transportation headwinds and labor wage rate increases, from the COVID pandemic; (2) the company's active subscriber enrollments had sharply decelerated from the growth trajectory represented in the offering documents and, as a result, it was several months away from approaching its pre-pandemic levels of active subscriptions; (3) the company needed to substantially increase marketing and advertising costs from historical figures in order to attempt to grow its active subscriber network; (4) the company was suffering ballooning fulfillment and transportation costs; and, (5) as a result, the company 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.
On Dec. 8, 2021, during Rent the Runway's Q3 2021 earnings call, management admitted the company was suffering transportation headwinds and labor wage rate increases during the quarter in which the IPO closed and that these headwinds were anticipated.
The company subsequently reported a decline in active subscribers, elevated fulfillment and marketing expenses, and a restructuring that include a 24% workforce reduction.
By Oct. 11, 2022, the price of Rent the Runway shares closed at $1.98, or about 90% below the IPO price.
"We're focused on investors' losses and proving Rent the Runway misled investors about problems it was experiencing when it went public and the purported effectiveness of its organic, or word-of-mouth, marketing," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Rent the Runway and have significant losses, or have knowledge that may assist the firm's investigation, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Rent the Runway should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
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About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Reed Kathrein, 844-916-0895
SOURCE: Hagens Berman Sobol Shapiro LLP