Pomerantz LLP files class action lawsuit against Oddity Tech, claiming the company misled investors about its AI technology, sales practices, and legal issues.
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| Beauty and wellness company Oddity Tech under fire for alleged AI hype and deceptive business practices. Investors seek damages in class action lawsuit. |
New York, USA – August 17, 2024:
Oddity Tech Ltd., a beauty and wellness company that touted its AI-driven business model, is facing a class action lawsuit alleging that the company misled investors about its operations and financial performance. The lawsuit, filed in the United States District Court for the Eastern District of New York, claims that Oddity overstated the role of AI in its business, inflated its sales figures through deceptive practices, and downplayed the extent of legal troubles facing the company.
The lawsuit alleges that Oddity, which went public in July 2023, painted a rosy picture of its business, emphasizing its AI capabilities as a key differentiator. Investors were drawn to the company's promise of using data science and machine learning to revolutionize the beauty and wellness industry. However, the lawsuit contends that the company’s claims about its AI technology were exaggerated.
Additionally, the complaint alleges that Oddity's reported high repeat purchase rates were artificially inflated through unsustainable and deceptive sales tactics. The company is accused of enrolling customers in non-cancelable plans without their full knowledge, allowing Oddity to recognize revenue even when customers were dissatisfied with the products.
Furthermore, the lawsuit claims that Oddity concealed the extent of legal issues it faced, including numerous lawsuits related to unpaid bills and consumer protection violations. These allegations came to light in a report by NINGI Research, which caused Oddity's stock price to plummet.
The class action seeks to recover damages for investors who purchased Oddity securities during the specified period. Shareholders have until September 17, 2024, to request to be appointed as lead plaintiff in the case.
The lawsuit highlights the increasing scrutiny faced by companies that rely heavily on technology and data to drive growth. As investors become more sophisticated, they are demanding greater transparency and accountability from publicly traded companies.
Pomerantz LLP, the law firm representing the plaintiffs, is known for handling complex class action lawsuits on behalf of investors.