NEW YORK, Sept. 17, 2021 /PRNewswire/ -- Bernstein Liebhard, a nationally acclaimed investor rights law firm, announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired the securities of The Honest Company, Inc. ("Honest " or the "Company") (NASDAQ: HNST) from May 3, 2021 through September 15, 2021(the "Class Period"). The lawsuit filed in the United States District Court for the Central District of California alleges violations of the Securities Act of 1934.
If you purchased Honest securities, and/or would like to discuss your legal rights and options please visit Honest Company Inc Shareholder Class Action Lawsuit or contact RujulPatel toll free at (877) 779-1414 or rpatel@bernlieb.com
According to the complaint, Honest and the Offering Documents made false and/or misleading statements and failed to disclose that: (1) that, prior to the IPO, the Company's results had been significantly impacted by a multimillion-dollar COVID-19 stock-up for products in the Diapers and Wipes category and Household and Wellness category; (2) that, at the time of the IPO, the Company was experiencing decelerating demand for such products; (3) that, as a result, the Company's financial results would likely be adversely impacted; and (4) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
On May 6, 2021, Honest completed its IPO, selling approximately 26 million shares of common stock for $16.00 per share.
On August 13, 2021, Honest announced its second quarter 2021 financial results, reporting a net loss of $20 million, compared to a net loss of only $0.4 million for the second quarter of 2020. Honest 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 also disclosed that its Diapers and Wipes category revenue declined 2% compared to the second quarter of 2020. Honest 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, the Company's stock price fell $3.98 per share, or 28%, to close at $10.07 per share on August 13, 2021, on unusually heavy trading volume.
On August 19, 2021, the Company's stock price closed at an all-time low of $9.16 per share, a nearly 43% decline from the $16.00 per share IPO price.
As of the time the complaint was filed, Honest's stock price continues to trade below the $16.00 per share Offering price, damaging investors.
If you wish to serve as lead plaintiff, you must move the Court no later than November 15, 2021. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn't require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased Honest securities, and/or would like to discuss your legal rights and options please visit https://www.bernlieb.com/cases/honestcompanyinc-hnst-shareholder-class-action-lawsuit-fraud-stock-441/or contact Rujul Patel toll free at (877) 779-1414 or rpatel@bernlieb.com
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal's "Plaintiffs' Hot List" thirteen times and listed in The Legal 500 for ten consecutive years.
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Contact Information:
Rujul Patel
Bernstein Liebhard LLP
https://www.bernlieb.com
(877) 779-1414
rpatel@bernlieb.com
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SOURCE Bernstein Liebhard LLP
