NEW YORK, July 20, 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 Southern District of New York on behalf of those who acquired CarLotz, Inc. (“CarLotz” or the “Company”) (NASDAQ: LOTZ) securities from December 30, 2020 through May 25, 2021, inclusive (the “Class Period”). Investors have until September 7, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On March 15, 2021, CarLotz announced its fourth quarter and full year 2020 financial results. During a related conference call, the Company stated that gross profit and gross profit per unit (“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, the Company’s stock price declined by $0.79 per share, or approximately 8.5%, from $9.24 per share to close at $8.45 per share on March 16, 2021.
Then, on May 10, 2021, after the market closed, CarLotz announced its first quarter 2021 financial results revealing that the GPU fell below expectations. In particular, the Company had expected retail GPU between $1,300 and $1,500 but reported $1,182. On this news, the Company’s stock price declined by $0.94 per share, or approximately 14.4%, from $6.51 per share to close at $5.57 per share on May 11, 2021.
Then, on May 26, 2021, before the market opened, CarLotz announced an update to its profit-sharing sourcing partner arrangement. Specifically, CarLotz stated 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, the Company’s stock price declined by $0.70 per share, or approximately 13.4%, from $5.21 per share to close at $4.51 per share on May 26, 2021.
The lawsuit alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made material misrepresentations concerning the following: (1) that, 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; (2) that, as a result, the Company’s GPU would be negatively impacted; (3) that, to minimize returns to the corporate vehicle sourcing partner responsible for more than 60% of CarLotz’s inventory, the Company was offering aggressive pricing; (4) that, as a result, CarLotz’s GPU forecast was likely inflated; (5) that this Company’s corporate vehicle sourcing partner would likely pause consignments to the Company due to market conditions, including increasing wholesale prices; and (6) as a result, Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.
If you purchased or otherwise acquired CarLotz securities, 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 investigations@kmllp.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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Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-371-6600
https://www.kmllp.com
investigations@kmllp.com