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Robbins Geller Rudman & Dowd LLP announces that it has filed a class action lawsuit seeking to represent purchasers of Rent the Runway, Inc. Class A common stock in or traceable to Rent the Runway’s October 27, 2021 initial public offering (the “IPO”). Captioned Sharma v. Rent the Runway, Inc., No. 22-cv-6935 (E.D.N.Y.), the Rent the Runway class action lawsuit charges Rent the Runway, certain of its top executives and directors, as well as the IPO’s underwriters with violations of the Securities Act of 1933.
You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at jsanchez@rgrdlaw.com. Lead plaintiff motions for the Rent the Runway class action lawsuit must be filed with the court no later than January 13, 2023.
CASE ALLEGATIONS: Rent the Runway is an e-commerce platform that allows users to rent, subscribe, or buy designer apparel and accessories. In the months leading up to the IPO, Rent the Runway claimed that it was experiencing a business resurgence as concerns about the COVID-19 pandemic lessened, lockdown orders ceased, and its customers engaged in more social outings.
However, as the Rent the Runway class action lawsuit alleges, the IPO’s offering documents failed to disclose the following material facts: (i) Rent the Runway was continuing to face extraordinary business headwinds, such as transportation headwinds and labor wage rate increases, from the COVID-19 pandemic; (ii) Rent the Runway’s active subscriber enrollments had sharply decelerated from the growth trajectory represented in the offering documents and, as a result, Rent the Runway was several months away from approaching its pre-pandemic levels of active subscriptions; (iii) Rent the Runway needed to substantially increase marketing and advertising costs from historical figures in order to attempt to grow its active subscriber network; (iv) Rent the Runway was suffering from ballooning fulfillment and transportation costs; and (v) as a result, Rent the Runway 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.
By October 2022, the price of Rent the Runway Class A common stock had fallen below $2 per share, 90% below the price at which Rent the Runway common stock had been sold to the investing public less than one year prior.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Rent the Runway Class A common stock in or traceable to the IPO to seek appointment as lead plaintiff in the Rent the Runway class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Rent the Runway class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Rent the Runway class action lawsuit. An investor’s ability to share in any potential future recovery of the Rent the Runway class action lawsuit is not dependent upon serving as lead plaintiff.
ABOUT ROBBINS GELLER: Robbins Geller is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm is ranked #1 on the 2021 ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors last year alone – more than triple the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 9 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world, and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. Please visit the following page for more information:
Contact:
Robbins Geller Rudman & Dowd LLP
655 W. Broadway, Suite 1900, San Diego, CA 92101
J.C. Sanchez, 800-449-4900
jsanchez@rgrdlaw.com
