RADNOR, PA / ACCESSWIRE / September 25, 2021 / Law firm Kessler Topaz Meltzer & Check, LLP reminds investors that a securities fraud class action lawsuit has been filed against HyreCar Inc. (NASDAQ: HYRE) (“HyreCar”) on behalf of those who purchased or acquired HyreCar titles between May 14, 2021 and August 10, 2021, inclusive (the “Class Period”).
Deadline reminder: Investors who purchased or acquired HyreCar securities during the recourse period may, no later than October 26, 2021, seek to be appointed as principal applicant representative of the group. For more information or to find out how to participate in this dispute, please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453; toll free at (844) 887-9500; by e-mail to[email protected]; WhereClick on https://www.ktmc.com/hyrecar-class-action-lawsuit?utm_source=PR&utm_medium=link&utm_campaign=hyrecar
HyreCar operates an online marketplace that allows car and fleet owners to rent their cars from Uber, Lyft and other economy service drivers. HyreCar operates a platform that connects concert drivers to automobiles, while also providing insurance and tactical support. HyreCar earns revenue from two revenue sharing fees (one from the driver and one from the owner) as well as from the driver’s insurance fees, with the insurance fees making up a significant percentage (if not the majority) of the revenue generated by each transaction. .
The Class Period begins on May 14, 2021. On May 13, 2021, after the market closed, HyreCar issued a press release stating that the Company achieved “Record First Quarter 2021 Financial Results” for the quarter ended 31 March 2021. The statement said that HyreCar’s insurance deposits more than doubled in the quarter to $ 1.7 million, while the amount of HyreCar’s insurance reserve (which shows the amount of claims incurred but not yet paid) had declined by more than 17% since the end of the year to $ 1.7. million.
The truth about HyreCar’s insurance revenue was revealed on August 10, 2021. After the market closed, HyreCar issued a press release announcing deeply disappointing results for the quarterly period ended June 30, 2021, including losses net of $ 9.3 million against losses of $ 3.8 million. at the same period the previous year. In addition, HyreCar’s adjusted profit before interest, taxes, depreciation, and amortization (“EBITDA”) for the second quarter of 2021 was $ 7.1 million (four times greater than the loss of adjusted EBITDA of $ 1. $ 7 million suffered in the second quarter of 2020) and its gross profit for the second quarter of 2021 was only $ 0.8 million (less than a third of HyreCar’s gross profit in the second quarter of 2020), with a gross profit margin of only 24%.
Following this news, HyreCar’s share price fell nearly 50% in a single day to close at $ 9.85 per share on August 11, 2021.
The complaint alleges that throughout the Class Period, the Defendants failed to disclose the following adverse facts, which were known to the Defendants or recklessly ignored by them: (1) HyreCar had substantially underestimated its reservations about assurance ; (2) HyreCar consistently failed to pay valid insurance claims incurred prior to the Class Period; (3) HyreCar had incurred significant expenses in transitioning to its new insurance claims administrator and handling claims incurred in previous periods; (4) HyreCar had not correctly priced the risk in its insurance products and therefore had a high incidence of claims; (5) HyreCar was forced to radically reform its underwriting, policies and claims procedures in response to unacceptable severity of claims and customer complaints; and (6) as a result of the foregoing, HyreCar’s operations and prospects have been distorted because the company was not on track to meet the financial estimates provided to investors during the Class Period, and such estimates did not have a reasonable basis in fact, including the alleged gross margin, EBITDA and net loss trajectories.
HyreCar investors can, no later than October 26, 2021, seek to be appointed as the lead representative of class claimants through Kessler Topaz Meltzer & Check, LLP, or another lawyer, or may choose to do nothing and remain an absent member of the class. A principal plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be named the Principal Plaintiff, the Court must determine that the Class Member’s claim is typical of the claims of other Class Members, and that the Class Member will adequately represent the Class. Your ability to participate in any recovery is not affected by the decision whether or not to serve as the principal applicant.
Kessler Topaz Meltzer & Check, LLP pursues class actions in state and federal courts across the country regarding securities fraud, breach of fiduciary duty, and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force in corporate governance reform and has raised billions of dollars on behalf of institutional and individual investors in the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and participate in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information on Kessler Topaz Meltzer & Check, LLP, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
280 route du Roi de Prussia
Radnor, Pennsylvania 19087
(844) 887-9500 (toll free)
THE SOURCE: Kessler Topaz Meltzer & Check, LLP
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