Governance & Derivative
The Honest Company, Inc. (NasdaqGS: HNST)
Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into The Honest Company, Inc. (NasdaqGS: HNST).
On May 6, 2021, The Honest Company completed its IPO, selling approximately 26 million shares of common stock for $16.00 per share. Approximately two months after the IPO, on August 13, 2021, the Company announced its 2Q2021 financial results, disclosing a net loss of $20 million, compared to a net loss of only $0.4 million for 2Q2020 and that its revenue grew only 3% as compared to the second quarter of 2020, due to “an estimated $3.7 million COVID-19 stock-up impact primarily in Diapers and Wipes in the prior year period.” The Company also disclosed that its Diapers and Wipes category revenue declined 2% compared to 2Q2020 and that “Household and Wellness revenue declined 6% from the second quarter of 2020 as consumer and customer demand for sanitization products decreased as consumers became vaccinated and customers managed heavy levels of inventory.”
Thereafter, the Company and certain of its executives were sued in a securities class action lawsuit, charging them with failing to disclose material information during the Class Period, violating federal securities laws, which remains ongoing.
KSF’s investigation is focusing on whether The Honest Company’s officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws. If you have information that would assist KSF in its investigation, or have been a long-term holder of The Honest Company shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-833-938-0905 or email KSF Managing Partner Lewis Kahn (firstname.lastname@example.org), or fill out the form on this page.