NEW YORK, Sept. 01, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Driven Brands Holdings, Inc. (NASDAQ: DRVN), Blink Charging Co. (NASDAQ: BLNK), and Lovesac Company (NASDAQ: LOVE). Our investigations concern whether these companies have violated the federal securities laws and/or engaged in other unlawful business practices. Additional information about each case can be found at the link provided.
Driven Brands Holdings, Inc. (NASDAQ: DRVN)
In 2015, the consumer brands and franchise focused private equity fund Roark Capital Group acquired Driven Brands which owned MAACO, Meineke Car Care Centers, and other automotive after-market companies. Roark acquired other businesses and brought them into Driven Brands and then took Driven Brands public in January 2021. In 2022, Driven Brands bought two companies in the auto glass service market, making it the second largest player in the U.S.
Before the market opened on August 2, 2023, Driven Brands announced weak second quarter 2023 results and issued weaker than expected third quarter 2023 guidance and lowered full year 2023 guidance. During the earnings call, management blamed increased competition in the car wash business over the prior two years. In addition, management said it is now "a few quarters behind" integrating the two auto glass acquisitions.
On this news, Driven Brands' stock price collapsed $10.63 per share to $15.20, a drop of 41.2% on very heavy volume.
For more information on the Driven Brands investigation go to: https://bespc.com/cases/DRVN
Blink Charging Co. (NASDAQ: BLNK)
On August 9, 2023, Blink disclosed that it received a subpoena from the Securities and Exchange Commission ("SEC") requesting the "production of documentation and other information since January 1, 2020, relating to various subjects, including executive departures, related-party transactions, number of EV charging stations, and other discrete disclosure matters." The Company further disclosed that it is "unable to predict what the timing or the outcome of the SEC investigation may be or what, if any, consequences the SEC investigation may have on us."
Following this news, Blink’s stock price dropped 14% per share on August 10, 2023.
For more information on the Blink investigation go to: https://bespc.com/cases/BLNK
Lovesac Company (NASDAQ: LOVE)
On August 15, 2023, Lovesac issued a press release announcing non-reliance on previously issued financial statements or a related audit report. The Company stated, “In June 2023, the Audit Committee (the “Audit Committee”) of the Board of Directors of The Lovesac Company (the “Company”) commenced an internal investigation related to the recording of last mile shipping expenses, resulting from the discovery of a recorded journal entry in the quarter ended April 30, 2023 to capitalize $2.2 million of shipping expenses that related to the fiscal year ended January 29, 2023. In addition to the aforementioned journal entry, the Company has identified through the investigation certain errors with the methodology used by the Company to calculate the accrual of its last mile freight expenses applicable to the Company’s financial statements for the fiscal year ended January 29, 2023 and the thirteen weeks ended April 30, 2023 (the “Prior Financial Statements”).” In addition, the Company stated “as a result of the identified errors related to last mile freight expenses, the Company believes that previously reported operating income and net income were overstated by approximately $1.5 million to $2.5 million and $1.0 million to $2.0 million, respectively, for fiscal year 2023. When aggregating this error with other estimated required correcting entries the Company believes that operating income and net income were overstated by approximately $2.0 million to $3.0 million and $1.5 million to $2.5 million, respectively, for the fiscal year ended January 29, 2023. Additionally, the Company believes that the identified errors related to the accrual methodology, together with the incorrectly recorded entry related to last mile freight expenses resulted in the overstatement of previously reported operating income and net income of less than $0.5 million, respectively, for the thirteen weeks ended April 30, 2023. When aggregating these errors with other estimated required correcting entries the Company believes that operating income and net income were overstated by less than $0.5 million, respectively, for the thirteen weeks ended April 30, 2023.” The Company further stated, “that the Company’s financial statements for fiscal year 2023 included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2023, management’s report on internal control over financial reporting for the fiscal year ended January 29, 2023, the associated audit report and report on internal control over financial reporting of the Company’s independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”), and the Company’s condensed financial statements included in the Company’s Quarterly Report on Form 10-Q for the thirteen weeks ended April 30, 2023, should no longer be relied upon.”
On this news, Lovesac’s stock price fell $0.50 per share, or 2.06%, to close at $23.76 per share on August 16, 2023.
For more information on the Lovesac investigation go to: https://bespc.com/cases/LOVE
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.