SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that purchasers of CarLotz, Inc. (NASDAQ: LOTZ; LOTZW) securities between December 30, 2020 and May 25, 2021, inclusive (the “Class Period”) have until September 7, 2021 to seek appointment as lead plaintiff in the CarLotz class action lawsuit. The CarLotz class action lawsuit charges CarLotz and certain of its top executives with violations of the Securities Exchange Act of 1934. The CarLotz class action lawsuit (Erdman v. CarLotz, Inc., No. 21-cv-05906) was commenced on July 8, 2021 in the Southern District of New York and is assigned to Judge Ronnie Abrams. A similar lawsuit, Widuck v. CarLotz, Inc., No. 21-cv-06191, is also pending in the Southern District of New York.
If you wish to serve as lead plaintiff of the CarLotz class action lawsuit, please provide your information by clicking here. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at jsanchez@rgrdlaw.com. Lead plaintiff motions for the CarLotz class action lawsuit must be filed with the court no later than September 7, 2021.
CASE ALLEGATIONS: On or about January 21, 2021, CarLotz became a public entity via merger with Acamar Partners Acquisition Corp., a special purpose acquisition company (“SPAC”) or blank check company, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses.
The CarLotz class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) 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; (ii) as a result, CarLotz’s gross profit per unit (“GPU”) would be negatively impacted; (iii) to minimize returns to the corporate vehicle sourcing partner responsible for more than 60% of CarLotz’s inventory, CarLotz was offering aggressive pricing; (iv) consequently, CarLotz’s GPU forecast was likely inflated; (v) that CarLotz’s corporate vehicle sourcing partner would likely pause consignments to CarLotz due to market conditions, including increasing wholesale prices; and (vi) as such, defendants’ positive statements about CarLotz’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On March 15, 2021, CarLotz announced its fourth quarter and full year 2020 financial results. During a related conference call, CarLotz stated that gross profit and 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, CarLotz’s stock price fell more than 8%.
Then, on May 10, 2021, CarLotz announced its first quarter 2021 financial results revealing that GPU fell below expectations. In particular, CarLotz had expected retail GPU between $1,300 and $1,500, but reported $1,182. On this news, CarLotz’s stock price fell by more than 14%. Finally, on May 26, 2021, CarLotz announced an update to its profit-sharing sourcing partner arrangement. Specifically, CarLotz revealed 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, CarLotz’s stock price fell an additional 13%, further damaging investors.
Robbins Geller Rudman & Dowd LLP has launched a dedicated SPAC Task Force to protect investors in blank check companies and seek redress for corporate malfeasance. Comprised of experienced litigators, investigators, and forensic accountants, the SPAC Task Force is dedicated to rooting out and prosecuting fraud on behalf of injured SPAC investors. The rise in blank check financing poses unique risks to investors. Robbins Geller Rudman & Dowd LLP’s SPAC Task Force represents the vanguard of ensuring integrity, honesty, and justice in this rapidly developing investment arena.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased CarLotz securities during the Class Period to seek appointment as lead plaintiff in the CarLotz class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the CarLotz class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the CarLotz class action lawsuit. An investor’s ability to share in any potential future recovery of the CarLotz class action lawsuit is not dependent upon serving as lead plaintiff.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm. Please visit https://www.rgrdlaw.com/firm.html for more information.
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