Olaplex Holdings, Inc.

On or around September 29, 2021, Olaplex commenced its initial public offering (“IPO”), selling 73.7 million shares priced at $21.00 per share.

On September 29, 2022, Piper Sandler downgraded the stock to Neutral based on work showing that “competition and misinformation pose growing risks to the company.”

On this news, Olaplex’s stock price fell $1.33, or 12.2%, to close at $9.62 per share on September 29, 2022, thereby injuring investors.

Then, on October 18, 2022, Olaplex reduced its financial outlook for fiscal 2022, expecting net sales between $704 million and $711 million. The Company attributed the revised guidance to “a slowdown in sales momentum that it attributes to macro-economic pressures, increased competitive activity including discounting, and a moderation in new customer acquisition.” Additionally, Olaplex announced that its Chief Operating Officer was stepping down from her post.

On this news, Olaplex’s stock fell $5.55, or 56.7%, to close at $4.24 per share on October 19, 2022, significantly below the IPO price. 

The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) macroeconomic pressures and competition in the haircare market were more robust than the Company had represented to investors; (2) accordingly, the Company was unlikely to maintain its sales and revenue momentum; and (3) as a result, it was unlikely that the Company would be able to achieve the financial and operational growth projected in the Offering Documents; and (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.