The Class: Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons and entities that purchased Torrid Holdings Inc. (NYSE: CURV) common stock in or traceable to the Company's July 2021 initial public offering ("IPO") for remedies pursuant to the Securities Act of 1933. Torrid is a direct-to-consumer brand of women's plus-size apparel and intimates.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Torrid. Shareholders who want to be appointed lead plaintiff for the class must file their papers by January 14, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: Torrid Holdings Inc. (CURV) Issued a Materially False and Misleading Registration Statement in Support of its IPO
According to the complaint, leading up to the IPO, Torrid claimed to be experiencing rapid sales growth and an impressive recovery following a temporary downturn in the face of the initial phases of the COVID-19 pandemic. In its IPO, Torrid sold 12.65 million shares at $21 per share, generating $265 million in proceeds. However, all of the shares sold were by Torrid insiders and none of the proceeds went to the Company.
In connection with the IPO, defendants failed to disclose that in the first half of 2021 Torrid had experienced a temporary surge in demand as a result of changed consumer behaviors in response to the COVID-19 pandemic and government stimulus and that such ephemeral demand trends had dissipated and were not internally projected to continue following the IPO. Further, Torrid was suffering from severe supply chain disruptions caused by the emergence of the Delta variant of COVID-19, which had first emerged in May 2021, and was running materially below historical inventory levels as a result, and therefore, had insufficient inventory to meet expected consumer demand for its fiscal third quarter of 2021. This late inventory arrival materially impaired the Company from effectively matching consumer buying trends, creating an undisclosed risk of increased markdowns and promotional activities necessary to sell undesirable inventory. Finally, defendants failed to disclose that Torrid’s CFO planned to retire shortly after the IPO.
By the end of September 2022, the price of Torrid stock fell to a low of just $4.06 per share, over 80% below the IPO price.
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