The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Rent the Runway, Inc. (RENT)
LOS ANGELES--(BUSINESS WIRE)--Jan 12, 2023--
The Law Offices of Frank R. Cruz reminds investors of the upcoming January 13, 2023 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who acquired Rent the Runway, Inc. (“RTR” or the “Company”) (NASDAQ: RENT ) Class A common stock pursuant and/or traceable to the Company’s October 2021 initial public offering (“IPO”).
If you are a shareholder who suffered a loss, click here to participate.
In October 2021, RTR conducted its IPO, selling 17 million shares of Class A common stock at $21 per share.
On December 8, 2021, RTR announced its third quarter 2021 financial results, disclosing that the Company had suffered a quarterly net loss of $87.8 million while its fulfillment expenses had increased by 75% and its marketing expenses had increased from $1.4 million to $10.8 million. The Company also reported a deceleration in active subscriber growth.
Then, on April 13, 2022, RTR reported that its active subscribers had declined during fourth quarter 2021, while its fulfillment and marketing expenses remained elevated compared to historical trends.
Then, on September 12, 2022, RTR disclosed that it only had 124,131 active subscribers. The Company also announced a “restructuring plan” to reduce costs, which included a 24% workforce reduction.
On this news, RTR’s stock price fell $1.91, or 38.7%, to close at $3.02 per share on September 13, 2022, thereby injuring investors.
By October 2022, the price of RTR Class A common stock had fallen below $2.00 per share, 90% below the IPO price.
The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that RTR was continuing to face extraordinary business headwinds, such as transportation headwinds and labor wage rate increases, from the COVID-19 pandemic; (2) that RTR’s active subscriber enrollments had sharply decelerated from the growth trajectory represented in the Registration Statement and, as a result, the Company was several months away from approaching its pre-pandemic levels of active subscriptions; (3) that RTR needed to substantially increase marketing and advertising costs from historical figures in order to attempt to grow its active subscriber network; (4) that RTR was suffering from ballooning fulfillment and transportation costs; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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If you purchased or otherwise acquired RTR Class A common stock pursuant and/or traceable to the IPO, you may move the Court no later than January 13, 2023 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to firstname.lastname@example.org, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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View source version on businesswire.com:https://www.businesswire.com/news/home/20230112005799/en/
CONTACT: The Law Offices of Frank R. Cruz, Los Angeles
Frank R. Cruz, 310-914-5007
KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: CLASS ACTION LAWSUIT PROFESSIONAL SERVICES LEGAL
SOURCE: The Law Offices of Frank R. Cruz
Copyright Business Wire 2023.
PUB: 01/12/2023 03:04 PM/DISC: 01/12/2023 03:04 PM