HYRECAR ALERT: Bragar Eagel & Squire, P.C. Announces That a Class Action Lawsuit Has Been Filed Against HyreCar and Encourages Investors to Contact the Firm
NEW YORK–(BUSINESS WIRE) – Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed against HyreCar Inc. (“HyreCar” or the “Company”) (NASDAQ: HYRE) in the US District Court for the Central District of California, on behalf of all individuals and legal entities who own HyreCar securities between the 14th investor, have until October 26, 2021 to petition the court to be named the lead plaintiff.
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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 soaring cost of sales during 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.
In light of the news, HyreCar’s stock price fell $ 9.27 per share, nearly 50%, to close at $ 9.85 per share on August 11, 2021.
The lawsuit alleges that during the class action period the defendants made false and misleading information and failed to disclose: (i) HyreCar materially underestimated 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.
If you have purchased or otherwise acquired HyreCar stock and have suffered a loss, are a long-term shareholder, have information, want to learn more about these claims, or have questions about this announcement or your rights or interests in relation to these matters, please contact Brandon Walker, Melissa Fortunato or Marion Passmore by email at [email protected], by phone at (212) 355-4648, or by completing this contact form. There are no costs or obligations for you.
About Bragar Eagle & Squire, PC:
Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California and South Carolina. The firm represents private and institutional investors in commercial, securities, derivatives and other complex litigation in state and federal courts across the country. More information about the company can be found at www.bespc.com. Lawyer advertising. Previous results do not guarantee similar results.