Class Action Lawsuits Filed Against Rent, Core Scientific, Torrid, and Olaplex

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NEW YORK, Jan. 08, 2023 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a law firm recognized nationally for its expertise in shareholder rights, informs investors that class action lawsuits have been initiated on behalf of shareholders of Rent the Runway, Inc. (NASDAQ: RENT), Core Scientific, Inc. (NASDAQ: CORZ), Torrid Holdings, Inc. (NYSE: CURV), and Olaplex Holdings, Inc. (NASDAQ: OLPX). Shareholders must adhere to the deadlines outlined below to petition the court and serve as lead plaintiff. For further details about each case, please follow the link provided.

Understanding the Class Action for Rent the Runway, Inc. (NASDAQ: RENT)

Class Period: Following the company’s IPO in October 2021

Lead Plaintiff Deadline: January 13, 2023

Rent the Runway (RTR) operates as a leading e-commerce platform that empowers customers to rent, subscribe to, or purchase luxury apparel and accessories. The platform features an extensive range of high-end clothing options including evening wear and stylish accessories, alongside casual and versatile items like ready-to-wear apparel, professional workwear, denim, maternity outfits, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, ski gear, home goods, and children’s clothing. RTR collaborates with over 750 renowned luxury brand partners to curate its unique inventory.

Customers can engage with RTR’s designer collections through various access points. They can enjoy ongoing access to an “unlimited closet” via subscription plans or opt for a-la-carte rentals through its “reserve offerings.” Additionally, subscribers and customers are presented with the option to purchase RTR products through its “resale offering.” Notably, in the first half of 2021, subscription revenue accounted for 83% of RTR’s total revenue, while reserve rental revenue contributed 7.6% and resale revenue constituted 9.4% of total revenue.

The impact of the COVID-19 pandemic on RTR’s business was significant, beginning in March 2020. As a provider of luxury clothing, RTR faced a steep decline in sales and services due to stay-at-home mandates and reduced social engagement opportunities for its customers. Comparatively, revenues fell nearly 40% from fiscal 2019 to 2020, dropping to $157.5 million, with active subscribers plummeting nearly 60% to just 54,797.

In the months leading to its IPO, RTR asserted a remarkable recovery as pandemic concerns eased, lockdowns were lifted, and social activities resumed. The company reported a surge in active subscribers, reaching 111,732 by September 30, 2021, marking a 104% increase since the start of fiscal year 2021. Furthermore, RTR’s second quarter of 2021 revealed revenues of $46.7 million, demonstrating a robust 62% year-over-year growth just prior to the IPO.

On October 4, 2021, RTR submitted a registration statement on Form S-1 to the SEC regarding its IPO, which was declared effective on October 26, 2021, after several amendments. The subsequent prospectus was filed on October 27, 2021, on Form 424B4, which was integrated into the Registration Statement. The company successfully sold 17 million shares of RTR Class A common stock at $21 per share, generating $357 million in gross proceeds, primarily utilized for repaying debt to private equity backers.

For further details regarding the Rent the Runway class action, visit: https://bespc.com/cases/RENT

Insights into Core Scientific, Inc. (NASDAQ: CORZ) Class Action

Class Period: January 3, 2022 – October 26, 2022

Lead Plaintiff Deadline: January 13, 2023

Core Scientific is a prominent blockchain computing data center provider and digital asset mining company. It engages in mining digital assets for its own portfolio and provides hosting services for large-scale mining operations. The company entered the public market through a business combination with Power & Digital Infrastructure Acquisition Corp. (“XPDI”) on January 19, 2022.

On March 3, 2022, Culper Research released a report alleging that Core Scientific had overstated profitability and that its largest customer lacked the financial capability to fulfill contractual obligations regarding equipment delivery. Following this revelation, Core Scientific’s stock saw a decline of $0.72, equating to 9.4%, closing at $6.98, adversely affecting investors.

On September 28, 2022, Celsius Network LLC and its affiliates filed a motion in bankruptcy court, claiming that Core Scientific had repeatedly breached automatic stay provisions by neglecting contractual obligations and threatening to terminate their agreement while imposing improper surcharges. This news led to a further decline in Core Scientific’s stock price, which fell $0.15, or 10.3%, to close at $1.30 on September 29, 2022, impacting investor confidence.

On October 27, 2022, Core Scientific issued a statement highlighting “substantial doubt” regarding its financial sustainability, indicating it was exploring alternatives to its capital structure. Moreover, the company reported a drastic reduction in its bitcoin holdings, dropping from 1,051 bitcoins on September 30, 2022, to just 24 bitcoins.

In light of this news, Core Scientific’s stock plummeted by $0.789, or 78.1%, closing at $0.221 per share, with unusually high trading activity observed.

Throughout the class period, the defendants allegedly made materially false and misleading statements while failing to reveal significant adverse facts about the company’s operational and financial health. Notably, they did not disclose rising power costs due to the expiration of a favorable pricing agreement, nor the financial struggles of their largest customer, Gryphon, to procure necessary mining rigs. Such omissions have likely led to substantial financial liabilities and negatively impacted the company’s profitability.

For more information on the Core Scientific class action, visit: https://bespc.com/cases/CORZ

Details on the Torrid Holdings, Inc. (NYSE: CURV) Class Action

Class Period: Related to the company’s IPO in July 2021

Lead Plaintiff Deadline: January 17, 2022

Torrid is a direct-to-consumer brand specializing in women’s plus-size apparel and intimates. Prior to its IPO, Torrid reported impressive sales growth and a solid recovery following a temporary decline due to the initial impacts of the COVID-19 pandemic, which began in March 2020. However, as outlined in the allegations, the Registration Statement for the IPO misrepresented the continuity of Torrid’s growth trajectory following the IPO.

The Registration Statement failed to disclose several adverse conditions existing at the time of the IPO, including a temporary surge in demand influenced by changes in consumer behavior due to the pandemic and government stimulus, which were expected to wane. Additionally, Torrid faced severe supply chain disruptions linked to the emergence of the Delta variant of COVID-19, leading to below-average inventory levels and an inability to meet projected consumer demand for its third fiscal quarter of 2021. This resulted in potential risks for increased markdowns necessary to sell excess inventory and diminished financial performance.

By September 2022, the stock price of Torrid had plummeted to a low of $4.06 per share, reflecting over an 80% drop from its IPO price.

For more information on the Torrid action, visit: https://bespc.com/cases/CURV

Overview of the Olaplex Holdings, Inc. (NASDAQ: OLPX) Class Action

Class Period: Associated with the company’s IPO on September 30, 2021

Lead Plaintiff Deadline: January 17, 2022

Founded in 2014 and headquartered in Santa Barbara, California, Olaplex specializes in manufacturing and selling innovative hair care products. The company offers a range of shampoos and conditioners designed for hair treatment, maintenance, and protection. Olaplex claims to operate within the “prestige segment” of the haircare market, which is anticipated to be the fastest-growing sector globally from 2020 to 2025.

On August 27, 2021, Olaplex filed a registration statement on Form S-1 with the SEC regarding the IPO, which received effective status on September 29, 2021, after multiple amendments.

Following this, on October 1, 2021, Olaplex submitted a prospectus on Form 424B4 to the SEC, which was part of the Registration Statement. During the IPO, Olaplex offered 73,700,000 shares of its common stock at an offering price of $21.00 per share, generating approximately $1.47 billion for the company after accounting for underwriting discounts and commissions.

However, the Offering Documents were negligently prepared, containing misleading statements or omitting critical facts required for accurate representation. Specifically, they failed to disclose the significant macroeconomic pressures and competitive challenges that posed risks to the company’s sales and revenue momentum. Consequently, the projections of financial and operational growth outlined in the Offering Documents were likely unattainable.

On September 29, 2022, a Piper Sandler analyst downgraded Olaplex to Neutral from Overweight, expressing concerns over increasing competition and misinformation affecting the company. The analyst indicated that substantial investments in marketing and education were necessary to mitigate these challenges, with limited potential for valuation upside given the prevailing risks. Following this news, Olaplex’s stock price dropped $1.33 per share, or 12.15%, closing at $9.62 on September 29, 2022.

Subsequently, on October 18, 2022, Olaplex released a press statement revising its guidance for the 2022 fiscal year, expecting revenues between $704 million and $711 million, significantly lower than previous guidance of $796 million to $826 million. This revision was attributed to a slowdown in sales momentum, intensified competition, inventory rebalancing, and adverse macroeconomic conditions.

As a result, on October 19, 2022, Olaplex’s stock price fell dramatically by $5.55 per share, equating to a 56.69% decrease, closing at $4.24 per share. At the time of this complaint, the price of Olaplex common stock remained below the offering price of $21.00 per share, significantly impacting investors.

Due to the defendants’ actions and omissions, along with the sharp decline in Olaplex’s stock value, the Plaintiff and other class members have experienced considerable losses and damages.

For further information on the Olaplex action, visit: https://bespc.com/cases/OLPX

About Bragar Eagel & Squire, P.C.: A Nationally Recognized Law Firm

Bragar Eagel & Squire, P.C. stands as a well-respected law firm with national recognition, operating offices in New York, California, and South Carolina. The firm specializes in representing both individual and institutional investors in complex litigation matters across state and federal courts nationwide. For additional information about the firm and its services, please visit www.bespc.com. This is attorney advertising; prior results do not guarantee similar outcomes.

Contact Information for Legal Inquiries:

Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
[email protected]
www.bespc.com