RADNOR, Pa., May 17, 2021 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP reminds Vroom, Inc. (NASDAQ: VRM) ("Vroom") investors that a securities fraud class action lawsuit has been filed against on behalf of those who purchased or acquired Vroom securities between June 9, 2020 and March 3, 2021, inclusive (the "Class Period").
Investor Deadline Reminder: Investors who purchased or acquired Vroom securities during the Class Period may, no later than May 21, 2021, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll free at (844) 887-9500; via e-mail at [email protected]; or click https://www.ktmc.com/vroom-class-action-lawsuit?utm_source=PR&utm_medium=link&utm_campaign=vroom
Vroom operates an end-to-end ecommerce platform that sells fully reconditioned vehicles.
The Class Period commences on June 9, 2020, when Vroom filed the prospectus for its initial public offering ("IPO") with the U.S. Securities and Exchange Commission ("SEC") on a Form 424B4, which incorporated and formed part of the registration statement for the IPO.
On September 8, 2020, Vroom filed with the SEC a registration statement on a Form S-1 for a follow-on stock offering, in which Vroom sold 10.8 million shares of stock at $54.50 per share for nearly $590 million in gross offering proceeds (the "Secondary Offering"). On September 11, 2020, Vroom filed the prospectus for the Secondary Offering with the SEC on a Form 424B4, which formed part of and incorporated the registration statement for the Secondary Offering.
According to the complaint, on March 3, 2021, Vroom announced its fourth quarter and full year 2020 financial results. Therein, Vroom reported that fourth quarter "Ecommerce Vehicle gross profit per unit decreased 13.1% to $878, driven primarily by lower sales margins, partially offset by improvements in inbound logistics and reconditioning costs per unit." Vroom also reported that for the fourth quarter, its "[n]et loss increased 41.9% to $60.7 million." During the accompanying earnings call, the defendants revealed that Vroom was suffering from serious sales and support bottlenecks which had severely constrained Vroom's growth and profits per vehicle.
Following this news, Vroom's stock price fell $12.29 per share, or 27.9%, to close at $31.61 per share on March 4, 2021.
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) Vroom was unable to sell a significant portion of existing inventory as a result of inadequate sales personnel and overreliance on third-party sales support; (2) Vroom's lack of adequate sales and support staff had resulted in severe growth constraints, degraded customer experience, lost sales opportunities and a greater than 10% increase in average days to sale for Vroom products; (3) Vroom had been forced to mark down and liquidate existing inventory at fire sale prices; and (4) as a result of the foregoing, the defendants' positive statements about Vroom's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Vroom investors may, no later than May 21, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)
SOURCE Kessler Topaz Meltzer & Check, LLP