The Honest Company Alert: Kaplan Fox Announces Investigation of The Honest Company
NEW YORK, Oct. 08, 2021 (GLOBE NEWSWIRE) -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of The Honest Company, Inc. (“Honest Company” or the “Company”) (NASDAQ: HNST). A class action securities lawsuit has been filed on behalf of investors who purchased or otherwise acquired Honest Company 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 (the "IPO").According to the complaint, Honest Company 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.” The Company’s three product categories are (1) Diapers and Wipes, (2) Skin and Personal Care, and (3) Household and Wellness, representing 63%, 26% and 11% of the Company’s 2020 revenue, respectively.
In the IPO and pursuant to the Company’s May 6, 2021 Registration Statement, Honest Company sold over 10 million shares, including the underwriters’ option, at $16 per share.
Approximately two months after the IPO, on August 13, 2021, Honest Company reported a net loss of $20 million for the second quarter of 2021, as compared to a net loss of only $0.4 million for the second quarter of 2020. Honest Company also 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.” During the conference call to discuss the Company’s second quarter results, the Company’s CFO said Honest Company had experienced “significant de-stocking by a key digital partner.”
Following 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 heaving trading volume.
The complaint alleges that the Registration Statement for the IPO failed to disclose FTA's non-compliance with the relevant regulations or the potential penalties for its non-compliance--including a suspension of new user additions during a cybersecurity review.
If you are a member of the proposed Class, you may move the court *no later than November 15, 2021 *to serve as a lead plaintiff for the purported class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to discuss the complaint or our investigation, please contact us by emailing pmayer@kaplanfox.com or by calling 646-315-9003.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com. If you have any questions about this Notice, your rights, or your interests, please contact:
Donald R. Hall
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(800) 290-1952
(646) 315-9003
Fax: (212) 687-7714
E-mail: dhall@kaplanfox.com
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
1999 Harrison Street, Suite 1560
Oakland, California 94612
(415) 772-4704
Fax: (415) 772-4707
E-mail: lking@kaplanfox.com