SHAREHOLDER ALERT: Law Firm Pomerantz Reminds Shareholders Who Have Suffered Losses On Their Investment In The Honest Company, Inc. Of Class Action And Upcoming Deadline
NEW YORK, October 15, 2021 / PRNewswire / – Pomerantz LLP announces that a class action lawsuit has been filed against The Honest Company, Inc. (âHonestâ or the âCompanyâ) (NASDAQ: HNST) and certain of its officers. The class action, filed in United States District Court of the Central District of California, and registered under 21-cv-08033, is in the name of a class composed of all persons and entities other than the Defendants who have purchased or otherwise acquired Honest ordinary shares in accordance with and / or traceable to the registration statement and the prospectus (collectively, the “Registration Declaration”) issued within the framework of the May 2021 initial public offering (âIPOâ or âthe Offerâ). The plaintiff is pursuing actions against the defendants under the Securities Act of 1933 (the “Securities Act”).
If you are a shareholder who purchased or otherwise acquired Honest ordinary shares in accordance with and / or traceable to the registration statement in connection with the company’s IPO, you have up to November 15, 2021 ask the court to appoint you as the principal plaintiff for the class. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby To [emailÂ protected] or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those inquiring by e-mail are encouraged to provide their mailing address, telephone number and the number of shares purchased.
Honest claims that it is a “digitally native, mission-driven brand focused on leading the Clean Lifestyle movement, creating a community for conscious consumers and seeking to disrupt multiple product categories from consumption”. Honest’s three product categories are (1) Diapers & Wipes, (2) Skin & Personal Care, and (3) Home & Wellness. According to Honest, these three categories accounted for 63%, 26% and 11% of Honest’s revenue in 2020, respectively.
At May 6, 2021, the Company has filed its prospectus on Form 424B4 with the SEC, which is part of the registration statement. On the IPO, the Company sold 6,451,613 common shares, plus 3,871,050 additional common shares pursuant to the underwriter’s option to purchase additional shares at a price of $ 16.00 per share. Some existing shareholders also sold a total of 19,355,387 ordinary shares as part of the IPO for $ 16.00 per share, including 15,229,543 by the executive officers and directors of Honest as a group (excluding the over-allotment option for subscribers).
The complaint alleges that the registration statement was materially false and misleading and omitted: (1) that prior to the IPO, the company’s results had been significantly affected by a multi-million dollar inventory of COVID-19 for the products of the diapers and wipes category and category Household and well-being; (2) that at the time of the IPO, the Company was experiencing a deceleration in demand for these products; (3) that as a consequence, the financial results of the Company would probably be adversely affected; and (4) that as a result of the foregoing, the Defendants’ positive statements regarding the business, operations and prospects of the Company were materially misleading and / or lacked reasonable basis.
At August 13, 2021, ahead of the market opening, Honest issued a press release titled “The Honest Company Reports Second Quarter 2021 Financial Results.” Honest reported a net loss of $ 20 million for the second quarter of 2021, compared to a net loss of only $ 0.4 million for the second quarter of 2020. Honest revealed that its revenue increased only 3% compared to the second quarter of 2020, as it was negatively impacted by “an estimate $ 3.7 million The impact on inventories of COVID-19, mainly in diapers and wipes during the period of the previous year. 6% from Q2 2020, as consumer and customer demand for disinfection products has declined as consumers get vaccinated and customers manage large inventory levels. “
Following this news, the Company’s share price fell $ 3.98 per share, or 28%, to close at $ 10.07 per share on August 13, 2021, on an unusually high volume of trade
At August 19, 2021, the Company’s share price closed at an all-time low of $ 9.16 per share, a decrease of almost 43% compared to the $ 16.00 IPO price per share.
Pomerantz LLP, with offices in new York, Chicago, Los Angeles, Paris, and Tel Aviv, is recognized as one of the leading firms in the areas of corporate, securities and antitrust litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class actions bar, Pomerantz was a pioneer in the field of securities class actions. Today, more than 85 years later, Pomerantz continues the tradition he established, fighting for the rights of victims of securities fraud, breach of fiduciary duty and corporate misconduct. The firm has recovered numerous multi-million dollar damages on behalf of the members of the group. See www.pomlaw.com
Robert S. Willoughby
888-476-6529 ext 7980
SOURCE Pomerantz LLP