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Press release content from Business Wire. The AP news staff was not involved in its creation.

HNST CLASS ACTION NOTICE: Glancy Prongay & Murray LLP Files Securities Class Action Lawsuit Against The Honest Company, Inc.

September 16, 2021 GMT

LOS ANGELES--(BUSINESS WIRE)--Sep 15, 2021--

Glancy Prongay & Murray LLP (“GPM”), announces that it has filed a class action lawsuit in the United States District Court for the Central District of California captioned Dixon v. The Honest Company, Inc., et al., (Case No. 21-cv-7405) on behalf of persons and entities that purchased or otherwise acquired The Honest Company, Inc. (“Honest” or the “Company”) (NASDAQ: HNST ) common stock pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s May 2021 initial public offering (“IPO” or the “Offering”). Plaintiff pursues claims under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).

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Investors are hereby notified that they have 60 days from this notice to move the Court to serve as lead plaintiff in this action.

If you suffered a loss on your Honest investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at https://www.glancylaw.com/cases/the-honest-company-inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com or visit our website at www.glancylaw.com to learn more about your rights.

On May 6, 2021, Honest completed its IPO, selling approximately 26 million shares of common stock for $16.00 per share.

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Approximately two months after the IPO, on August 13, 2021, before the market opened, 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.

The Registration Statement was materially false and misleading and omitted: (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.

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If you purchased or otherwise acquired Honest common stock pursuant and/or traceable to the IPO, you may move the Court no later than 60 days from this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.

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/20210915006190/en/

CONTACT: Glancy Prongay & Murray LLP, Los Angeles

Charles H. Linehan, 310-201-9150 or 888-773-9224

1925 Century Park East, Suite 2100

Los Angeles, CA 90067

www.glancylaw.com

shareholders@glancylaw.com

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICES

SOURCE: Glancy Prongay & Murray LLP

Copyright Business Wire 2021.

PUB: 09/15/2021 10:00 PM/DISC: 09/15/2021 10:02 PM

http://www.businesswire.com/news/home/20210915006190/en