RADNOR, Pa., Feb. 15, 2024 /PRNewswire/ — The law firm of Kessler Topaz Meltzer & Check, LLP (www.ktmc.com) informs investors that a securities class action lawsuit has been filed in the United States District Court for the Central District of California against Xponential Fitness, Inc. (“Xponential”) (NYSE: XPOF). The action charges Xponential with violations of the federal securities laws, including omissions and fraudulent misrepresentations relating to the company’s business, operations, and prospects. As a result of Xponential’ s materially misleading statements and omissions to the public, Xponential’ s investors have suffered significant losses.
CLICK HERE TO SUBMIT YOUR XPONENTIAL LOSSES. YOU CAN ALSO CLICK ON THE FOLLOWING LINK OR COPY AND PASTE IN YOUR BROWSER: https://www.ktmc.com/new-cases/xponential-fitness-inc?utm_source=PR&utm_medium=link&utm_campaign=xpof&mktm=r
LEAD PLAINTIFF DEADLINE: APRIL 9, 2024
CLASS PERIOD: JULY 26, 2021 THROUGH DECEMBER 7, 2023
CONTACT AN ATTORNEY TO DISCUSS YOUR RIGHTS:
Jonathan Naji, Esq. at (484) 270-1453 or via email at [email protected]
Kessler Topaz is one of the world’s foremost advocates in protecting the public against corporate fraud and other wrongdoing. Our securities fraud litigators are regularly recognized as leaders in the field as well as the firm itself which is continuously awarded for the successful results we’ve achieved. We are proud to have recovered billions of dollars for our clients and the classes of shareholders we represent.
In addition to representing investors in cases where the fraud has been revealed, Kessler Topaz also represents whistleblowers – persons who expose wrongdoing to those in positions of authority or to the public- in cases brought under federal and state qui tam statutes, and through financial fraud whistleblower programs, such as those run by the SEC, CFTC and IRS. If you have information about fraud against government programs (such as Medicare), or violations of federal securities, commodities, tax or anti-foreign bribery laws, contact Kessler Topaz at (866) 369-7779 or at [email protected] or go to https://www.ktmc-whistleblower.com.
DEFENDANTS’ ALLEGED MISCONDUCT
In July 2021, Defendants took Xponential public through an initial public offering, selling over ten million Xponential shares at $12 per share. Thereafter and throughout the Class Period, Defendants failed to disclose that the company’s franchisees – from whom Xponential derived substantially all of its revenue – were largely failing, with the majority of the company’s store brands losing money, dozens of studios operating at a loss (forcing some to close permanently), and more than 100 franchisees listed for sale at a fraction of their initial cost. Despite the foregoing, Xponential misled new franchisees to sign up with the company with false and misleading promises of robust financial returns, misleading claims regarding past studio performance, and deceptive assurances of corporate support.
The truth began to be revealed on June 26, 2023, when market analyst Fuzzy Panda Research published a short-sellers report alleging, among other things, that Xponential is “hiding the fact that many of their brands and franchisees are struggling.” The report further alleges that, despite the claims of Xponential’s CEO that the company has “never closed a store,” Fuzzy Panda found over 30 permanently closed stores. Moreover, the report claims that franchise documents of Xponential suggest that 8 out of every 10 Xponential brands are losing money monthly, with over half of Xponential studios never making a positive financial return.
Following this news, Xponential’s stock price fell $9.39, or 37.4%, to close at $15.72 per share on June 27, 2023.
Then, on December 7, 2023, Bloomberg Businessweek published an article on Xponential that corroborated many of the allegations reported in the Fuzzy Panda report. Specifically, the article reported that Bloomberg Businessweek had interviewed dozens of former business partners, employees, and franchisees of Xponential who revealed that Xponential misled many franchisees into a “financial nightmare,” and that Xponential’s management “has a track record of combative management, deploying growth-at-all-costs tactics and unleashing aggressive reprisals against anyone who gets in his way.” As a result, these unscrupulous tactics caused “many of the company’s franchisees . . . [to] have either declared bankruptcy or los[e] their retirement savings.”
Following this news, the price of Xponential common stock fell more than 26% over two trading days.
Finally, on December 11, 2023, Xponential disclosed that it was contacted by the SEC requesting that Xponential provide it “with certain documents.” Addressing the SEC’s request, Xponential stated that the company “does not otherwise intend to provide additional information regarding this matter unless and until it believes there is a material development that warrants public disclosure.”
Following this news, Xponential’s stock price fell more than 14% during intraday trading on December 11, 2023.
WHAT CAN I DO?
Xponential investors may, no later than April 9, 2024, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. Kessler Topaz Meltzer & Check, LLP encourages Xponential investors who have suffered significant losses to contact the firm directly to acquire more information. The class action complaint against Xponential, City of Taylor General Employees Retirement System v. Xponential Fitness, Inc., et al., Case No. 24-cv-00285, is filed in the United States District Court for the Central District of California.
CLICK HERE TO SIGN UP FOR THE CASE
WHO CAN BE A LEAD PLAINTIFF?
A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country and around the world. The firm has developed a global reputation for excellence and has recovered billions of dollars for victims of fraud and other corporate misconduct. All of our work is driven by a common goal: to protect investors, consumers, employees and others from fraud, abuse, misconduct and negligence by businesses and fiduciaries. The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.
CONTACT:
Kessler Topaz Meltzer & Check, LLP
(484) 270-1453
280 King of Prussia Road
Radnor, PA 19087
[email protected]
SOURCE Kessler Topaz Meltzer & Check, LLP
