CarLotz (LOTZ) $13M Investor Settlement
CarLotz has agreed to settle $13 million with $LOTZ investors to resolve claims that it misled them about its financial health and operations post-SPAC merger with Acamar Partners.
In 2020, CarLotz positioned itself as a disruptive used-car marketplace, emphasizing an “asset-light” business model reliant on consignment sales. However, the company later revealed excess inventory, declining gross profit per vehicle (GPU), and issues with its primary sourcing partner. These disclosures led to multiple stock declines, ultimately eroding more than 70% of $LOTZ's value. On July 8, 2021, investors filed a lawsuit, claiming CarLotz misrepresented its financial health and business operations.
Timeline
October 22, 2020 – CarLotz announced its SPAC merger with Acamar Partners.
March 16-18, 2021 – The company disclosed excess inventory issues, causing $LOTZ to drop 8.5%, followed by another 7.3% decline two days later.
May 10-12, 2021 – CarLotz reported a decline in GPU, triggering a 14% drop on May 11 and an additional 8% on May 12.
May 26, 2021 – CarLotz announced that its key sourcing partner had paused consignments, leading to a 13.4% stock drop.
July 8, 2021 – Investors filed a lawsuit, claiming CarLotz misrepresented its inventory sourcing and financial stability.
January 24, 2025 – CarLotz agreed to a $13 million settlement, pending court approval.
In March 2021, CarLotz disclosed that it was struggling with excess inventory, slowing sales, and declining profitability, causing $LOTZ to drop 8.5%, followed by another 7.3% decline two days later.
By May 2021, the company reported that its gross profit per vehicle had fallen below expectations, triggering a 14% stock drop on May 11 and another 8% decline on May 12.
The most severe impact came on May 26, 2021, when CarLotz revealed that its largest sourcing partner had stopped consignments, raising concerns about its ability to sustain operations. This news caused $LOTZ to fall 13.4%.
As CarLotz continued to report weak financial results and declining sales, the stock decline continued, reaching over 70% drop. Following these events, investors sued CarLotz in July 2021, alleging the company misrepresented its business model and financial condition.
What Can Investors Expect Now?
CarLotz has agreed to settle $13 million with $LOTZ investors to resolve claims that it misled them about its financial health and operations post-SPAC merger with Acamar Partners.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement.
Frequently Asked Questions
All persons who purchased or otherwise acquired CarLotz’s publicly traded common stock during the period October 22, 2020, through May 26, 2021.
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
The final payout amount depends on your specific trades and the number of investors participating in the settlement.
If 100% of investors file their claims - the average payout will be $0.22 per share. Although typically only 25% of investors file claims, in this case, the average recovery will be $0.88 per share.
11thestate is an investor recovery company, we help investors to track and collect securities class action settlements. We will:
1. Prepare documents for your payout
2. Audit the claim and make sure you get the maximum possible payout
3. File a claim with the settlement administration
4. Correspond with the settlement administration to resolve emerging issues
5. Deliver payout directly to your brokerage account
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.