Investors in LuxUrban Hotels Inc who suffered losses exceeding $50,000 between 8 November 8 2023 and 2 February 2024 have been reminded of the 12 April 2024, deadline to seek the role of lead plaintiff in a federal securities class action.
The action alleges that LuxUrban and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose crucial information.
Allegations of misrepresentation
The complaint alleges that they failed to sign a lease with the Royalton Hotel, overstated total reported units and faced multiple lawsuits for unpaid rent.
LuxUrban announced a 25-year master lease agreement with the Royalton Hotel in November 2023. But a report released on 17 January 2024 claims that this lease was not actually signed.
LuxUrban allegedly also faces numerous lawsuits for unpaid rent, a fact not previously disclosed by the company.
The company’s stock price plummets
Following the revelations, LuxUrban's stock price experienced significant declines. On 17 January 2024, its stock fell by 12%, closing at $4.32 per share.
The downward trend continued the next day, with a further 10% drop, closing at $3.89 per share on 18 January.
On 2 February LuxUrban announced the termination of discussions to add the Royalton Hotel to its properties, resulting in another substantial drop in the stock price.
Legal repercussions of the litigation
As a consequence of these events, LuxUrban's stock price fell a further 22% to $3.50 per share on 5 February 2024.
The court-appointed lead plaintiff in the class action represents investors with the largest financial interest in the relief sought by the class.
Investors with information regarding LuxUrban's conduct are encouraged to contact Faruqi & Faruqi LLP.
