LuxUrban Hotels Inc.
| Company Name | LuxUrban Hotels Inc. |
| Stock Symbol | LUXH |
| Class Period | November 08, 2023 to February 02, 2024 |
| Lead Plaintiff Motion Deadline | April 12, 2024 |
In November 2023, the Company announced it had signed a 25-year Master Lease Agreement (“MLA”) with the prestigious Royalton Hotel in New York.
On January 17, 2024, Bleecker Street Research published a report, which alleged that the Company had not actually signed a lease with the Royalton Hotel. The report stated the owner of the Royalton hotel building confirmed LuxUrban never actually signed a lease, nor even provided a Letter of Credit. The report also alleged the Company was embroiled in a number of lawsuits that “allege LuxUrban failed to pay rent repeatedly,” and “in the last six months has been sued by landlords at four of their properties for unpaid rent” but that LuxUrban had “never once disclosed the nature of these lawsuits.”
On this news, the Company’s stock price fell $0.58, or 12% to close at $4.32 on January 17, 2024, on unusually heavy trading volume. The stock price continued to fall an additional $0.42, or 10%, to close at $3.89 on January 18, 2024, on unusually heavy trading volume.
Then on February 2, 2024, after the market closed, LuxUrban announced the “termination of discussions to add the Royalton Hotel to its roster of properties” and that it was “withdrawing its prior statements regarding the Royalton” including prior quarterly reports which listed the Royalton under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Property Summary—Properties under lease, not operating.”
On this news, the Company’s stock price fell $0.99, or 22%, to close at $3.50 per share on February 5, 2024, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, 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: (1) that the Company had not signed a lease with the Royalton Hotel; (2) that, as a result, LuxUrban’s total reported units was overstated; (3) that LuxUrban faced multiple lawsuits for unpaid rent; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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