INVESTOR ALERT: Law Offices of Howard G. Smith Announces the Filing of a Securities Class Action on Behalf of CarLotz, Inc. (LOTZ) Investors
BENSALEM, Pa.--(BUSINESS WIRE)--Jul 9, 2021--
Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased CarLotz, Inc. (“CarLotz” or “the Company”) (NASDAQ: LOTZ ) securities between December 30, 2020 and May 25, 2021, inclusive (the “Class Period”). CarLotz investors have until September 7, 2021 to file a lead plaintiff motion.
Investors suffering losses on their CarLotz investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
On March 15, 2021, CarLotz announced its fourth quarter and full year 2020 financial results. During a related conference call, the Company stated that gross profit and gross profit per unit (“GPU”) “were softer than . . . expected” due to “the surge in inventory during the quarter and the resulting lower retail unit profitability.” CarLotz also reported that the additional inventory “created a logjam that resulted in slower processing and higher days to sell.”
On this news, the Company’s stock price fell $0.79, or 8.5%, to close at $8.45 per share on March 16, 2021, on unusually heavy trading volume. The stock price continued to decline over the next two consecutive trading sessions by $0.62, or 7.3%, to close at $7.83 per share on March 18, 2021, on unusually heavy trading volume.
Then, on May 10, 2021, after the market closed, CarLotz announced its first quarter 2021 financial results revealing that gross profit per unit fell below expectations. In particular, the Company had expected retail GPU between $1,300 and $1,500, but reported $1,182.
On this news, the Company’s stock price fell $0.94, or 14%, to close at $5.57 per share on May 11, 2021, on unusually heavy trading volume. The stock price continued to decline $0.45, or 8%, to close at $4.12 per share on May 12, 2021, on unusually heavy trading volume.
Then, on May 26, 2021, before the market opened, CarLotz announced an update to its profit-sharing sourcing partner arrangement. Specifically, CarLotz stated that its “profit-sharing corporate vehicle sourcing partner informed the Company that, in light of current wholesale market conditions, it has paused consignments to the Company.” Moreover, this partner “accounted for more than 60% of the cars sold and sourced” during first quarter 2021 and “less than 50% of the cars sold and approximately 25% of cars sourced” during second quarter 2021 to date.
On this news, the Company’s stock price fell $0.70, or 13.4%, to close at $4.51 per share on May 26, 2021, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, 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 made material misrepresentations concerning the following: (1) that, due to a surge in inventory during the second half of fiscal 2020, CarLotz was experiencing a “logjam” resulting in slower processing and higher days to sell; (2) that, as a result, the Company’s gross profit per unit would be negatively impacted; (3) that, to minimize returns to the corporate vehicle sourcing partner responsible for more than 60% of CarLotz’s inventory, the Company was offering aggressive pricing; (4) that, as a result, CarLotz’s gross profit per unit forecast was likely inflated; (5) that this Company’s corporate vehicle sourcing partner would likely pause consignments to the Company due to market conditions, including increasing wholesale prices; and (6) as a result, Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.
If you purchased CarLotz securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com:https://www.businesswire.com/news/home/20210709005403/en/
CONTACT: Law Offices of Howard G. Smith
Howard G. Smith, Esquire
KEYWORD: PENNSYLVANIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICES
SOURCE: Law Offices of Howard G. Smith
Copyright Business Wire 2021.
PUB: 07/09/2021 01:18 PM/DISC: 07/09/2021 01:18 PM