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NEW YORK, Sept. 21, 2021 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of those who 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”). Investors have until November 15, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Honest claims 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 consumer product categories.”
On May 6, 2021, Honest completed its IPO, selling approximately 26 million shares of common stock for $16.00 per share.
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 declined by $3.98 per share, or approximately 28.3%, from $14.05 per share to close at $10.07 per share on August 13, 2021.
On August 19, 2021, the Company’s stock price closed at an all-time low of $9.16 per share, approximately 42.8% decline from the $16.00 per share IPO price.
The lawsuit 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 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.
If you purchased or otherwise acquired Honest stock, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at email@example.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.
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