ThredUp (TDUP) Unprofitable Business Model Case

• On November 6, 2023, ThredUp (TDUP) issued its Q3’ 23 financial results, with EPS and revenue missing estimates. The following day, The Motely Fool published an article on Company’s stock plunge, enumerating ThredUp’s problems with margins, cash flow and business model.

• On it, $TDUP fell 33,43%, losing $88M+ of shareholder value.

• Investors may have grounds to suspect ThredUp of business setbacks, which led to their losses.

On November 6, 2023, ThredUp issued its Q3’ 2023 financial results, reporting Q3 GAAP EPS and revenue both missing consensus estimates.

The following day, The Motely Fool published an article entitled “Why ThredUp Stock Plunged 36% Today”, noting, among other things, that

• revenue growth hasn’t led to the kind of operating margins that investors hoped for,

• while the Company keeps burning cash, and

• ThredUp’s concept, selling products on consignment and secondhand hasn’t proven to be profitable.

On this news, $TDUP fell 33.43% and lost over $88 million of its market capitalization, seriously damaging shareholders.

This fall represents an 83.64% decline from the Company’s March 2021 IPO price.

Considering all the information, investors might have grounds to suspect ThredUp of failing to timely disclose its business setbacks, which led to their losses.

The case is already under investigation by at least one of the reputable law firms.