SAN FRANCISCO, Dec. 26, 2023 (GLOBE NEWSWIRE) -- Hagens Berman urges Xponential Fitness, Inc. (NYSE: XPOF) investors who suffered substantial losses to submit your losses now.
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Xponential Fitness, Inc. (XPOF) Investigation:
"We are investigating whether XPOF may have misrepresented its business model and key financial metrics,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation.
The firm commenced the investigation after news that XPOF faces an SEC investigation and franchisee financial issues caused the price of the company’s shares to decline sharply.
Specifically, on Dec. 11, 2023, XPOF announced that it had been contacted on Dec. 5, 2023 by the SEC with a formal request to provide it with “certain documents.” However, XPOF said that for now it does not intend to disclose additional information about the SEC inquiry.
Just days before announcing the SEC probe, on Dec. 7, 2023, Bloomberg published a scathing article about the company entitled “How the Biggest Boutique Fitness Company Turned Suburban Moms Into Bankrupt Franchisees.” Bloomberg reported that more than 30 current and former franchisees say “Xponential deliberately misled them and their peers about the strength of the individual franchises prior to signing the [franchise] agreement,” and some claim “the company inflated revenue and profit projections based on unrealistic membership numbers and grossly underestimated costs.”
The Bloomberg article is not the first time XPOF’s business practices have come under attack. In June 2023, activist short seller Fuzzy Panda Research released a detailed report based in part on interviews with former business partners, franchisees, and employees of Xponential Fitness’ CEO (Anthony Geisler), concluding “the XPOF house of cards is beginning to fall.”
Fuzzy Panda found that over 50% of the company’s average studios are losing money, 80% of its brands have unprofitable business models, franchisees are giving their studios back to XPOF for $1, more of the worst loss-making transition studios are on XPOF’s balance sheet and they have become harder for XPOF to re-sell, and XPOF has closed lots of studios despite management’s claim to never have closed a single studio.
If you invested in Xponential Fitness and have substantial losses, or have knowledge that may assist the firm’s investigation, click here to discuss your legal rights with Hagens Berman »
If you’d like more information and answers to frequently asked questions about the Xponential Fitness investigation, read more »
Whistleblowers: Persons with non-public information regarding Xponential Fitness should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email XPOF@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation law firm focusing on corporate accountability through class-action law. The firm is home to a robust securities litigation practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and fraud. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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Contact:
Reed Kathrein, 844-916-0895
