Upcoming Lead Plaintiff Deadline is April 9, 2024
NEW YORK, Feb. 17, 2024 /PRNewswire/ -- Wolf Haldenstein Adler Freeman & Herz LLP ("Wolf Haldenstein") announces that a federal securities class action lawsuit has been filed against Xponential Fitness, Inc. (NYSE: XPOF) ("Exponential") on behalf of publicly traded Class A common stockholders who purchased shares between July 26, 2021 and December 7, 2023, inclusive (the "Class Period").
All investors who purchased shares and incurred losses are advised to contact the firm immediately at classmember@whafh.com or (800) 575-0735 or (212) 545-4774. You may obtain additional information concerning the action or join the case on our website, www.whafh.com.
If you have incurred losses, you may, no later than April 9, 2024, request that the Court appoint you lead plaintiff of the proposed class. Please contact Wolf Haldenstein to learn more about your rights.
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Xponential is the largest global franchisor of boutique fitness brands. The Company operates a diversified platform of ten brands spanning across verticals including Pilates, indoor cycling, barre, stretching, dancing, boxing, running, functional training and yoga.
In July 2021, Xponential conducted its Initial Public Offering ("IPO"), selling over ten million shares at $12 per share. After the IPO, Xponential conducted two additional registered stock offerings that allowed insiders to sell additional stock – an April 2022 secondary offering at $10 per share and a February 2023 secondary offering. In total, insider executive defendants sold nearly $270 million of personally owned stock in secondary offerings and other market transactions.
On June 26, 2023, market analyst and short-seller Fuzzy Panda Research published a report entitled "Xponential Fitness (XPOF) – Abusive Franchisor That Is A House of Cards." The report alleged that the Company's CEO Anthony Geisler "has a long history of misleading investors and business partners" including engaging in pump and dump schemes, "scams" and "illegal business practices." Additionally, the report alleged that the Company's financials are less healthy than what was represented to investors, that the Company is likely violating its debt agreements, and contrary to Geisler's claims that Xponential has "never closed a store" – there were many closed Xponential locations. According to the report, more than 50% of the Company's fitness studios did not have positive returns, while approximately 80% of its brands were losing money monthly.
On this news, Xponential's stock fell $9.39 per share or 37% to close at $15.72 per share.
In response, on June 28, 2023, Xponential issued a press release responding to the allegations, which it referred to as "misleading information." Therein, the Company made representations regarding the strength of the Xponential franchise system and its revenues, clarified how the Company may repurchase or assume control of studios or move studios between franchisees resulting in temporary closures, and the Company's commitment to ethics, diversity, and inclusion, as well as its sturdy base of insider ownership led by Geisler.
On November 21, 2023, Business Insider published a report regarding the shuttering of several Xponential franchises owned by Mitch Brown, a self-described entrepreneur and franchisee. According to the article, Brown took ownership of 68 studio locations from franchise licenser Xponential Fitness in early September "for next to nothing", but within a matter of weeks, payroll issues arose at various locations. In the article, Xponential disclaimed responsibility, but also stated that it "has attempted to assist the franchisee to remedy this situation."
Then on December 7, 2023, Bloomberg Businessweek published a report, which corroborated Fuzzy Panda's allegations. The report was based on interviews with dozens of former business partners, employees, and franchisees who revealed that Xponential misled many franchisees into a "financial nightmare." Following publication of this article, the price of Xponential common stock fell more than 26% to close at less than $9.00 per share on December 11, 2023.
Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions regarding your rights and interests in this case, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735 or via e-mail at classmember@whafh.com.
Contact:
Wolf Haldenstein Adler Freeman & Herz LLP
Gregory Stone, Director of Case and Financial Analysis
Email: gstone@whafh.com or classmember@whafh.com
Tel: (800) 575-0735 or (212) 545-4774
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
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SOURCE Wolf Haldenstein Adler Freeman & Herz LLP
