Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Rent the Runway, Core Scientific, and Bird and Encourages Investors to Contact the Firm
NEW YORK, Nov. 21, 2022 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Rent the Runway, Inc. (NASDAQ: RENT), Core Scientific, Inc. (NASDAQ: CORZ), and Bird Global, Inc. (NYSE: BRDS). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Rent the Runway, Inc. (NASDAQ: RENT)
Class Period: pursuant to the company’s October 2021 IPO
Lead Plaintiff Deadline: January 13, 2023
RTR is an e-commerce platform that allows users to rent, subscribe, or buy designer apparel and accessories. RTR offers high-end apparel such as evening wear and accessories, as well as more causal and mixed-use items such as ready-to-wear, workwear, denim, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, ski wear, home goods, and kidswear. RTR sources its products from over 750 luxury brand partners.
Customers can access RTR’s designer inventory in several ways. RTR gives customers ongoing access to its “unlimited closet” through its subscription offerings or the ability to rent a-la-carte through its “reserve offerings.” Subscribers and customers also have the ability to buy RTR products through its “resale offering.” In the first six months of 2021, subscription revenue represented 83% of RTR’s total revenue, reserve rental revenue represented 7.6% of RTR’s total revenue, and resale revenue represented 9.4% of RTR’s total revenue.
RTR’s business was severely impacted by the COVID-19 pandemic, which began in March 2020. As a luxury clothing provider, RTR’s sales and services suffered from stay-athome orders and the decline in opportunities for social gatherings among its customer base. Between its fiscal 2019 and 2020, RTR’s revenues declined nearly 40% to $157.5 million and its total active subscribers declined nearly 60% to 54,797 active subscribers.1
In the months leading up to the IPO, RTR claimed that it was experiencing a business resurgence as concerns about the COVID-19 pandemic lessened, lockdown orders ceased, and its customers engaged in more social outings. For example, the Company stated that it had grown to 111,732 active subscribers as of September 30, 2021, representing 104% growth since the beginning of fiscal year 2021. Similarly, the Registration Statement stated that during RTR’s second quarter of 2021 (the quarter immediately prior to the IPO) quarterly revenues had grown to $46.7 million, representing 62% growth year-over-year.
On October 4, 2021, the Company filed with the SEC a registration statement on Form S-1 for the IPO, which, after several amendments, was declared effective on October 26, 2021 (the “Registration Statement”). On October 27, 2021, the Company filed with the SEC a prospectus for the IPO on Form 424B4, which incorporated and formed part of the Registration Statement (the “Prospectus”). The Registration Statement and Prospectus were used to sell to the investing public 17 million shares of RTR Class A common stock at $21 per share for $357 million in gross offering proceeds, which was used in substantial part to pay back debt from certain of the Company’s private equity backers.
For more information on the Rent the Runway class action go to: https://bespc.com/cases/RENT
Core Scientific, Inc. (NASDAQ: CORZ)
Class Period: January 3, 2022 - October 26, 2022
Lead Plaintiff Deadline: January 13, 2023
Core Scientific is a blockchain computing data center provider and digital asset mining company. It mines digital assets for its own account and provides hosting services for other large-scale miners. It became a public company via business combination with Power & Digital Infrastructure Acquisition Corp. (“XPDI”) consummated on January 19, 2022 (the “Business Combination”).
On March 3, 2022, Culper Research published a report about Core Scientific alleging, among other things, that the Company had overstated its profitability and that the Company’s largest customer lacked the financial resources to deliver the rigs pursuant to its contract.
On this news, Core Scientific’s stock fell $0.72, or 9.4%, to close at $6.98 on March 3, 2022, thereby injuring investors.
On September 28, 2022, Celsius Network LLC and related entities filed a motion to enforce the automatic stay and for civil contempt in bankruptcy proceedings alleging that Core Scientific “has knowingly and repeatedly violated the automatic stay provisions” by refusing to perform its contractual obligations, threatening to terminate the companies’ agreement, and adding improper surcharges.
On this news, Core Scientific’s stock price fell $0.15, or 10.3%, to close at $1.30 on September 29, 2022, thereby injuring investors.
On October 27, 2022, before the market opened, Core Scientific disclosed that “given the uncertainty regarding the Company’s financial condition, substantial doubt exists about the Company’s ability to continue as a going concern,” and that it is exploring alternatives to its capital structure. Moreover, the Company held 24 bitcoins, compared to 1,051 bitcoins as of September 30, 2022.
On this news, Core Scientific’s stock fell $0.789, or 78.1%, to close at $0.221 per share on October 27, 2022, on unusually high trading volume.
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 failed to disclose to investors: (1) that, due in part to the expiration of a favorable pricing agreement, the Company was experiencing increasing power costs; (2) that the Company’s largest customer, Gryphon, lacked the financial resources to purchase the necessary miner rigs for Core Scientific to host; (3) that the Company was not providing hosting services to Celsius as required by their contract; (4) that the Company had implemented an improper surcharge to pass through power costs to Celsius; (5) that, as a result of the foregoing alleged breaches of contract, the Company was reasonably likely to incur liability to defend itself against Celsius; (6) that, as a result of the foregoing, the Company’s profitability would be adversely impacted; (7) that, as a result, there was likely substantial doubt as to the Company’s ability to continue as a going concern; (8) and that as a result of the foregoing, Defendant’s positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
For more information on the Enviva class action go to: https://bespc.com/cases/CORZ
Bird Global, Inc. (NYSE: BRDS)
Class Period: May 14, 2021 - November 14, 2022
Lead Plaintiff Deadline: January 17, 2023
On November 14, 2022, Bird filed attached to a Form 8-K announcing it would restate its consolidated financial statements for certain periods due to issues concerning the recognition of Sharing Revenue. In pertinent part, the press release stated:
On November 11, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) of Bird Global, Inc. (the “Company”), after discussion with management, determined that (i) the Company’s audited consolidated financial statements as of December 31, 2021 and 2020, and for the years then ended, and quarterly periods within those years, included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2022, (ii) its condensed consolidated financial statements as of March 31, 2022, and for the three months then ended, included in the Quarterly Report on Form 10-Q filed with the SEC on May 16, 2022 and (iii) its condensed consolidated financial statements as of June 30, 2022, and for the three and six months then ended, included in the Quarterly Report on Form 10-Q filed with the SEC on August 15, 2022 (collectively, the “Original Filings”, and each such quarterly or annual period covered therein, an “impacted period”), should no longer be relied upon. Similarly, any previously furnished or filed reports, related earnings releases, investor presentations or similar communications of the Company describing the Company’s financial results contained in the Original Filings should no longer be relied upon. The determination results from an error identified in connection with the preparation of the Company’s condensed consolidated financial statements as of September 30, 2022, and the three and nine months then ended, related to its business system configuration that impacted the recognition of revenue on certain trips completed by customers of its Sharing business (“Rides”) for which collectability was not probable. Specifically, for certain customers with insufficient preloaded “wallet” balances, the Company’s business systems recorded revenue for uncollected balances following the completion of certain Rides that should not have been recorded. The Company believes the error resulted in an overstatement of Sharing revenue in the consolidated statements of operations for the impacted periods and an understatement of deferred revenue in the consolidated balance sheets as of the end of each impacted period. The Company intends to amend the Original Filings as soon as practicable. In connection with the restatement, management has reevaluated the effectiveness of the Company’s disclosure controls and procedures. Management has concluded that the Company’s disclosure controls and procedures are not effective at a reasonable assurance level, due to a material weakness in its internal control over financial reporting related to the ineffective design of controls around its business systems that resulted in the recording of revenue for uncollected balances following the completion of certain Rides that should not have been recorded. The Company is in the process of designing and implementing controls to remediate these deficiencies. (Emphasis added.)
On this news, share prices of Bird plummeted $0.069 per share, or over 15%, from the prior trading date to close on November 14, 2022, at $0.364 per share, damaging investors.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Bird class action go to: https://bespc.com/cases/BRDS
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
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