NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-vroom-inc-class-action-lawsuit.html) today announced that it filed a class action seeking to represent purchasers of Vroom, Inc. (NASDAQ:VRM) common stock during the period between June 9, 2020 and March 3, 2021, inclusive (the “Class Period”). This action was filed in the Southern District of New York and is captioned Holbrook v. Vroom, Inc., No. 21-cv-2551.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Vroom common stock during the Class Period to seek appointment as lead plaintiff in the Vroom class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Vroom class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Vroom class action lawsuit. An investor’s ability to share in any potential future recovery of the Vroom class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Vroom class action lawsuit, you must move the Court no later than 60 days from March 22, 2021. If you wish to discuss the Vroom class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at firstname.lastname@example.org. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-vroom-inc-class-action-lawsuit.html.
The Vroom class action lawsuit charges Vroom and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Vroom operates an end-to-end ecommerce platform that sells fully reconditioned vehicles.
The complaint alleges that, during the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) 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; (ii) 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; (iii) Vroom had been forced to mark down and liquidate existing inventory at fire sale prices; and (iv) as a result of the foregoing, defendants’ positive statements about Vroom’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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, defendants revealed that Vroom was suffering from serious sales and support bottlenecks which had severely constrained the Company’s growth and profits per vehicle. On this news, Vroom’s stock price fell 28%, damaging investors.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.