|Company Name||Polished.com Inc.|
|Class Period||July 27, 2020 to August 25, 2022|
|Lead Plaintiff Motion Deadline||December 30, 2022|
On or about July 27, 2020, the Company completed its IPO, issuing approximately 1,111,200 shares at $9.00 per share.
On March 29, 2021, after the market closed, Polished revealed that its financial statements for fiscal 2019 and periodic reports during fiscal 2020 should no longer be relied upon due to a recent U.S. Supreme Court decision regarding sales taxes for online sellers. On this news, the Company’s stock price fell $0.37, or 4%, to close at $8.63 per share on March 30, 2021.
Then, on August 15, 2022, after the market had closed, Polished disclosed that it is unable to timely file its second quarter 2022 report due to an ongoing investigation regarding “certain allegations made by certain former employees related to the Company’s business operations.” On this news, the Company’s stock fell $0.54, or 35.8%, to close at $0.97 per share on August 16, 2022, thereby injuring investors.
Then, on August 25, 2022, after market hours, the Company announces that it was no longer in compliance with NYSE American rules due to its failure to timely file its quarterly report and that it was given an extension to regain compliance. On this news, the Company’s stock fell $0.06, or 7.5%, to close at $0.74 per share on August 26, 2022, thereby injuring investors further.
Then, on October 14, 2022, Polished announced that its Chief Executive Office and President, its Chief Operating Officer, and its Chief Financial Officer and Secretary had all resigned, effective immediately. On this news, the Company’s stock fell $0.037, or 7.5%, to close at $0.458 per share on October 17, 2022, thereby injuring investors further.
On October 26, 2022, the Company’s share price closed at $0.55 per share, representing a 93.9% decline from the IPO price of $9.00 per share.
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) the Company would restate certain financials; (2) the Company’s internal controls were inadequate; (3) the Company downplayed and obfuscated its internal controls issues; (4) the Company did not properly construct or remediate its inadequate and ineffective internal controls; (5) contrary to the Company’s statements, the Company was not remediating its internal controls; (6) as a result, the Company would engage in an independent investigation; (7) as a result of the investigation, the Company would, among other things, retain independent counsel and consultants, and delay its quarterly filings in violation of NYSE requirements of listing; (8) following the commencement of the investigation, the Company’s CEO and CFO would leave the Company; and (9) 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.
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