NEW YORK, July 18, 2021 /PRNewswire/ — Pomerantz LLP is investigating claims on behalf of investors of CarLotz, Inc. («CarLotz» or the «Company») (NASDAQ: LOTZ). Such investors are advised to contact Robert S. Willoughby at email@example.com or 888-476-6529, ext. 7980.
The investigation concerns whether CarLotz and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
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 by $0.45, or 8%, to close at $4.12 per share on May 12, 2021, on unusually heavy trading volume.
Finally, 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
SOURCE Pomerantz LLP