NEW YORK, Aug. 3, 2021 /PRNewswire/ — Pomerantz LLP announces that a class action lawsuit has been filed against CarLotz, Inc. («CarLotz» or the «Company») (NASDAQ: LOTZ) (NASDAQ: LOTZW) and certain of its officers. The class action, filed in the United States District Court for the Southern District of New York, and docketed under 21-cv-06191, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired CarLotz securities between December 30, 2020 and May 25, 2021, inclusive (the «Class Period»).Plaintiff pursues claims against the Defendants under the Securities Exchange Act of 1934 (the «Exchange Act»).
If you are a shareholder who purchased or otherwise acquired CarLotz securities during the Class Period, you have until September 7, 2021 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
CarLotz operates a consignment-to-retail used vehicle marketplace where corporate vehicle sourcing partners and retail sellers of used vehicles can sell at prices that are, on average, below those of traditional dealerships.
On or about January 21, 2021, CarLotz became a public entity via merger with Acamar Partners Acquisition Corp., a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
The complaint 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 gross profit per unit 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 gross profit per unit 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) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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 fell $0.79, or 8.5%, to close at $8.45 per share on March 16, 2021, on unusually heavy trading volume. The stock price continued to decline over the next two consecutive trading sessions by $0.62, or 7.3%, to close at $7.83 per share on March 18, 2021, on unusually heavy trading volume.
On May 10, 2021, after the market closed, CarLotz announced its first quarter 2021 financial results revealing that gross profit per unit 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 fell $0.94, or 14%, to close at $5.57 per share on May 11, 2021, on unusually heavy trading volume. The stock price continued to decline $0.45, or 8%, to close at $5.12 per share on May 12, 2021, on unusually heavy trading volume.
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 fell $0.70, or 13.4%, to close at $4.51 per share on May 26, 2021, on unusually heavy trading volume.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 7980
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SOURCE Pomerantz LLP