NEW YORK, August 22, 2021 (GLOBE NEWSWIRE) – Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against CarLotz Inc (“CarLotz” or the “Company”) (LOTZ) and reminds investors of the September 7, 2021 deadline to apply for the role of lead plaintiff in a federal securities class action lawsuit that has been filed against the Company.
If you suffered losses greater than $ 50,000 while investing in stocks or CarLotz options between December 30, 2020 and May 25, 2021 and want to discuss your legal rights, call partner Faruqi & Faruqi Josh Wilson directly To 877-247-4292 Where 212-983-9330 (ext. 1310). You can also click here for more information: www.faruqilaw.com/LOTZ.
There is no cost or obligation for you.
Faruqi & Faruqi is a leading national minority and women-owned securities law firm, with offices in New York, Delaware, Pennsylvania, California and Georgia.
As detailed below, the lawsuit focuses on whether the Company and its officers violated federal securities laws by making false and / or misleading statements and / or failing to disclose them: (1 ) due to an increase in inventory in the second half of fiscal 2020, CarLotz was experiencing “traffic jam” resulting in slower processing and longer selling days; (2) as a result, the gross profit per unit of the Company would be negatively impacted; (3) to minimize returns to the corporate vehicle supply partner responsible for more than 60% of CarLotz’s inventory, the Company was offering aggressive pricing; (4) as a result, CarLotz’s gross margin per unit forecast has likely been inflated; (5) that company’s corporate vehicle supply partner would likely suspend shipments to the company due to market conditions, including increased wholesale prices; and (6) as a result of the foregoing, the Defendants’ positive statements regarding the business, operations and prospects of the Company were substantially misleading and / or lacked reasonable basis.
On March 15, 2021, CarLotz announced its fourth quarter and full year 2020 financial results. During a related conference call, the company stated that the gross margin and gross margin per unit (“GPU”) “ were less than. . . expected “due to” the increase in inventory during the quarter and the resulting drop in profitability of retail units. “CarLotz also reported that the additional inventory” created a bottleneck which resulted in slower processing and longer selling days ”.
Following 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 high trading volume. The stock price continued to decline over the next two consecutive trading days by $ 0.62, or 7.3%, to close at $ 7.83 per share on March 18, 2021, on trading volume unusually high.
On May 10, 2021, after the market closed, CarLotz announced its financial results for the first quarter of 2021 showing that the gross margin per unit was below expectations. In particular, the company expected the retail GPU to be between $ 1,300 and $ 1,500, but said $ 1,182.
Following 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 high 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 high trading volume.
Then, on May 26, 2021, ahead of the market opening, CarLotz announced an update to its profit-sharing sourcing partnership agreement. Specifically, CarLotz said that its “profit sharing company vehicle supply partner has informed the company that, in light of the current wholesale market conditions, it has suspended shipments to the company.” In addition, this partner “accounted for over 60% of cars sold and sourced” during the first quarter of 2021 and “less than 50% of cars sold and around 25% of cars sourced” during the second quarter of 2021 to date.
Following this news, the Company’s share price fell $ 0.70, or 13.4%, to close at $ 4.51 per share on May 26, 2021, on unusually high trading volume.
The principal plaintiff appointed by the court is the investor with the greatest financial interest in the remedy sought by the group, who is adequate and typical of the members of the group who are directing and supervising the litigation on behalf of the putative group. Any putative class member can propose to the court to serve as lead plaintiff through any lawyer they choose, or they can choose to do nothing and remain an absent member of the class. Your ability to participate in any recovery is not affected by the decision whether or not to serve as the principal applicant.
Faruqi & Faruqi, LLP also encourages anyone with information regarding CarLotz’s conduct to contact the company, including whistleblowers, former employees, shareholders and others.
Lawyer advertising. The law firm responsible for this announcement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Past results do not guarantee or predict a similar result with respect to any future matter. We welcome the opportunity to discuss your particular case. All communications will be treated confidentially.