According to the Complaint, Xponential Fitness, Inc. claims to be the largest global franchisor of boutique fitness brands, with a platform offering ten brands in categories that include Pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga.On June 26, 2023, short-biased analyst firm Fuzzy Panda Research published a report titled “Xponential Fitness (XPOF) – ‘Abusive Franchisor That Is A House Of Cards’". Among other revelations, the Fuzzy Panda Report alleged that one of the individual Defendants has had a long history of misleading investors, including being exposed on camera for using “boiler room” tactics to mislead investors in connection with a prior venture and issuing false claims that Xponential “never closed a store.” On this news, the price of Xponential common stock fell more than 37%.The Complaint alleges that during the Class Period, Defendants disseminated materially false and misleading statements and failed to disclose the full truth about the Company's operations, leading to artificial inflation in the price of Xponential common stock.
Recent Security Class Actions
According to the Complaint, Archer-Daniels-Midland Company ("ADM") is a multinational food processing and commodities trading corporation that engages in the production of oilseeds, corn, wheat, cocoa, and other agricultural commodities.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material facts, about the performance and prospects of ADM's Nutrition segment and its accounting practices. Specifically, the Complaint alleges Defendants made positive statements about the Nutrition segment as a future profit-driver for the Company, with the ability to capitalize on healthier eating trends and rising consumer demand for natural ingredients and flavoring, and that Defendants created the impression that the Nutrition segment's growth would provide more diversification and earnings stability for ADM. However, the Complaint alleges that the Nutrition segment's ostensibly impressive growth was inaccurate and subject to improper accounting practices, and Defendants also downplayed the segment's eventual decline in 2023. The Complaint claims that Defendants' actions caused the price of ADM common stock to trade at artificially inflated levels during the Class Period.
According to the Complaint, ON Semiconductor Corporation manufactures and sells semiconductor components for various electronic devices worldwide.
The Complaint alleges that throughout the Class Period, Defendants misrepresented to investors: (1) the demand for the Company's silicon carbide ("SiC") and other products, and (2) the sustainability of the Company's revenue growth, by overstating the impact of the Company's long-term supply agreements ("LTSAs") on the achievability of its revenue streams. The Complaint further alleges that investors were significantly harmed as a result of Defendants' false and misleading statements and material omissions. During the Class Period, the Company's market capitalization value reached a high of $46.6 billion on August 1, 2023, before falling to $28.2 billion on October 30, 2023.
According to the Complaint, the General Motors Company is an automotive manufacturing company that designs, builds, and sells trucks, crossovers, cars, and automobile parts worldwide. The Company markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling brand names.
Cruise is GM's majority-owned global segment responsible for the development and commercialization of AV technology. Cruise has secured various testing and driving permits for its AVs on the ostensible premise that those AVs were sufficiently safe for such purposes.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects. Specifically, the Complaint alleges Defendants made false and/or misleading statements and/or failed to disclose that: (i) GM downplayed concerns with its vehicles' airbags and the need to record additional warranty accruals for related product recalls; (ii) GM overstated the extent and efficacy of its efforts to analyze defects in its vehicles' airbag inflators; (iii) Cruise's AVs and/or AV technology were less safe and well-developed than Defendants had led investors, regulators, and the general public to believe; (iv) accordingly, regulatory approval of Cruise's AV products was unsustainable and the prospects for widespread regulatory approval and adoption of Cruise's AV products were overstated; (v) all the foregoing subjected GM to an increased risk of governmental and/or regulatory scrutiny and enforcement action, significant legal liabilities, product recalls, and reputational harm; and (vi) as a result, Defendants' public statements were materially false and/or misleading at all relevant times.
On December 7, 2023, The Estee Lauder Companies, Inc. was sued for violations of the federal securities laws in the United States District Court for the Southern District of New York on behalf of investors who purchased
or otherwise acquired Estee’s common stock between August 18, 2022 and May 2, 2023, inclusive (the “Class Period”).
On November 27, 2023, Roblox Corporation was sued for violations of the federal securities laws in the United States District Court for the Southern District of New York on behalf of investors who purchased or otherwise acquired Roblox Class A common stock between March 10, 2021 and February 15, 2022, inclusive (the “Class Period”).
According to the Complaint, Paycom Software, Inc. purports to be a "leading provider of a comprehensive, cloud-based human capital management solution delivered as "Software-as-a-Service."
On July 6, 2021, Paycom released a press release entitled "Paycom Launches Beti, an Industry-First Employee-Driven Payroll Solution." Paycom characterized Beti as the "industry's first self-service payroll technology allowing employees to do their own payroll, improving data accuracy, oversight and the user experience for businesses and their employees on each payroll cycle."
The Complaint alleges that Defendants throughout the Class Period made materially false and/or misleading statements and/or failed to disclose that: (1) Paycom's Beti product led to cannibalization of the Paycom's services and revenues; (2) Paycom knew but failed to disclose that Beti was leading to cannibalization of Paycom's services and revenues, and failed to warn of cannibalization as a general risk; (3) as a result of cannibalization of revenue, Paycom missed its expected 3Q23 revenue and would have to revise its expected 2023 revenues; (4) the cannibalization issue resulted in projected 2024 year-over-year revenue growth to between 10% and 12%, well below expectations; and (5) as a result, Defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
On November 7, 2023, SCYNEXIS, Inc. was sued for violations of the federal securities laws in the United States District Court for the District of New Jersey on behalf of investors who purchased or otherwise acquired Scynexis securities between March 31, 2023 and September 22, 2023, inclusive (the “Class Period”).
According to the Complaint, DermTech, Inc. is a molecular diagnostic company that develops and markets non-invasive genomics test to aid the diagnosis and management of skin cancer, inflammatory skin diseases, and aging-related skin conditions. The DermTech Melanoma Test ("DMT") is a commercial test offered to assess pigmented skin lesions for melanoma.
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, the Complaint alleges Defendants failed to disclose to investors: (1) that the Company experienced challenges with collections from commercial payors; (2) that, as a result, there was a lower average selling price for DermTech's DMT; (3) that, as a result of the foregoing, the Company's revenue growth would be adversely impacted; and (4) 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 September 19, 2023, CS Disco, Inc. was sued for violations of the federal securities laws in the United States District Court for the Southern District of New York on behalf of investors who purchasedshares of CS Disco’s common stock between July 21, 2021, and August 11, 2022, inclusive (the “Class Period”).
