Ticker: RTR

Class Period Start: 10/27/2021

Class Period End: 11/14/2022

Registration Deadline: 01/13/2023

Lowey Dannenberg Notifies Rent the Runway, Inc. Investors of Securities Class Action Lawsuit and Upcoming Lead Plaintiff Deadline.

 

Lowey Dannenberg P.C., a preeminent law firm in obtaining redress for consumers and investors, announced the filing of a securities class action lawsuit in the USDC – E.D.N.Y. against Rent the Runway, Inc. (NASDAQ: RENT) (“Rent the Runway” or the “Company”), on behalf of purchasers of the Rent the Runway’s Class A common stock in or traceable to the Company’s October 27, 2021 initial public offering (the “IPO”), for violations of the Securities Act of 1933.

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.

The Complaint, filed against Rent the Runway, certain of its top executives and directors, and underwriters of its October 2021 Initial Public Offering (“IPO”), alleges that the Company failed to disclose material facts in their IPO’s Offering Documents. Specifically, the IPO’s offering documents failed to disclose that:

  • Rent the Runway was continuing to face extraordinary business headwinds, such as transportation headwinds and labor wage rate increases, from the COVID-19 pandemic;
  • Rent the Runway’s active subscriber enrollments had sharply decelerated from the growth trajectory represented in the offering documents and, as a result, Rent the Runway was several months away from approaching its pre-pandemic levels of active subscriptions;
  • Rent the Runway needed to substantially increase marketing and advertising costs from historical figures in order to attempt to grow its active subscriber network;
  • Rent the Runway was suffering from ballooning fulfillment and transportation costs; and
  • as a result, Rent the Runway was suffering accelerating operational losses at the time of the IPO and was far less likely to achieve profitability in the near term, if ever, than represented.

By October 2022, the price of Rent the Runway Class A common stock had fallen below $2 per share, 90% below the price at which Rent the Runway common stock had been sold to the investing public less than one year prior.

If you suffered a loss in Rent the Runway’s securities, and wish to participate, or learn more, click here, or please contact our attorneys at (914) 733-7234 or via email at investigations@lowey.com.  Any investor of the Company’s Class A common stock in or traceable to the Company’s October IPO who wishes to serve as Lead Plaintiff must act before the court deadline of January 13, 2023.

 About Lowey Dannenberg

Lowey Dannenberg is a national firm representing institutional and individual investors, who suffered financial losses resulting from corporate fraud and malfeasance in violation of federal securities and antitrust laws. The firm has significant experience in prosecuting multi-million-dollar lawsuits and has recovered billions of dollars on behalf of its clients.

If you suffered a loss on your investments or would like to inquire about joining an action to recover your loss under the federal securities laws, please complete the form below.

An attorney will contact you at no cost to provide you information about joining the action and answer your questions. Please note that submission of this form does not by itself form an attorney-client relationship nor does filing out this form mean you have joined any lawsuit.

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