HYRE ALERT: Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against HyreCar Inc. and Announces Opportunity for Investors with Substantial Losses to Lead Case
SAN DIEGO–(BUSINESS WIRE) – Robbins Geller Rudman & Dowd LLP has filed a class action lawsuit against HyreCar Inc. (NASDAQ: HYRE) and some of its executives for violating the Securities Exchange Act of 1934, seeking buyers of HyreCar securities between May 14, 2021 represented and August 10, 2021, inclusive (the “Class Period”). The HyreCar class action lawsuit was initiated in the Central District of California on August 27, 2021 and is entitled Baron v. HyreCar Inc., No. 21-cv-06918.
If you would like to act as the lead plaintiff in the HyreCar class action, please provide your information by clicking here. You can also contact Attorney JC Sanchez of Robbins Geller by phone at 800 / 449-4900 or by email at [email protected] Motions by the lead plaintiffs for the HyreCar class action lawsuit must be filed with the court no later than October 26, 2021.
The plaintiff is represented by Robbins Geller, who has extensive experience in prosecuting investor class actions, including lawsuits related to financial fraud. You can view a copy of the complaint by clicking here.
CASE ALLEGES: The HyreCar class action alleges that, during the class action period, defendants made false and misleading statements and failed to disclose that: (i) HyreCar had materially undervalued its insurance reserves; (ii) HyreCar has systematically failed to pay valid insurance claims that arose prior to the class period; (iii) HyreCar had incurred significant costs in moving to its new liability insurance officer and handling claims from previous periods; (iv) HyreCar had failed to properly account for the risk in its insurance products and, as a result, had an increased frequency of claims; (v) HyreCar has been forced to drastically reform its property insurance, policies and procedures in response to unacceptably high claims severity and customer complaints; and (vi) as a result, HyreCar’s business and prospects have been misrepresented because HyreCar was not on track to meet the financial estimates presented to investors during the class action period and, in fact, those estimates, including the alleged gross margin, were not based on reasonable grounds and HyreCar’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net loss paths.
On August 10, 2021, HyreCar announced deeply disappointing results for the quarterly period ended June 30, 2021 (“Q2 2021”), including net losses of $ 9.3 million compared to losses of $ 3.8 million in the same period last year. Additionally, HyreCar’s adjusted EBITDA loss for the second quarter of 2021 was 7.1 million in the second quarter of 2020) with a gross profit margin of just 24%. Simultaneously with the release, HyreCar announced that HyreCar had soared in cost of sales over the quarter, largely due to a significantly higher insurance loss – including claims prior to March 31, 2021 that exceeded reserves. During the HyreCar conference call, executives announced that HyreCar had been forced to revise its claims processes and procedures and improve its risk pricing adjustments for policies issued by HyreCar. And when asked whether HyreCar was actually on the right track to achieve 45 to 50% gross margin in the short term, as previously shown, the CFO of HyreCar essentially withdrew that goal and called it a “shooting for the sky” goal and stated that “shooting for margin” over 40% “was more realistic. As a result of this news, the price of HyreCar shares fell nearly 50%, which hurt investors.
LEAD ACTION: The Private Securities Litigation Reform Act of 1995 allows any investor who has purchased HyreCar securities during the class action period to seek appointment as the lead plaintiff in the HyreCar class action. A lead plaintiff is usually the applicant with the greatest financial interest in the legal protection sought by the alleged class, which is also typical and appropriate for the alleged class. A lead plaintiff is acting on behalf of all other group members in directing the HyreCar class action lawsuit. The lead plaintiff can select a law firm of their choice to bring the HyreCar class action lawsuit. An investor’s ability to participate in a possible future recovery of the HyreCar lawsuit does not depend on being the lead plaintiff.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 attorneys in 9 offices across the country, Robbins Geller Rudman & Dowd LLP is the largest US law firm serving investors in securities class actions. Robbins Geller’s attorneys have secured many of the largest shareholder recoveries in history, including the largest securities class action of all time – $ 7.2 billion – in In re Enron Corp. Sec. Lit. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for getting $ 1.6 billion back for investors last year, more than double the amount paid by any other securities plaintiff firm was drafted. More information is available at http://www.rgrdlaw.com.
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