SOND CLASS ACTION NOTICE: Glancy Prongay & Murray LLP Files Securities Fraud Lawsuit Against Sonder Holdings Inc.

Published 6 months ago via Business Wire

Glancy Prongay & Murray LLP (“GPM”), announces that it has filed a class action lawsuit in the United States District Court for the Central District of California, captioned Park v. Sonder Holdings Inc., et al., Case No. 2:24-cv-04798, on behalf of persons and entities that purchased or otherwise acquired Sonder Holdings Inc. (“Sonder” or the “Company”) (NASDAQ: SOND) securities between May 11, 2022 and March 15, 2024, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

Investors are hereby notified that they have until June 10, 2024 to move the Court to serve as lead plaintiff in this action.

If you suffered a loss on your Sonder investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at www.glancylaw.com/cases/Sonder-Holdings-Inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com or visit our website at www.glancylaw.com to learn more about your rights.

On March 15, 2024, after the market closed, the Company disclosed it had identified an “accounting error” related to the Company’s valuation of certain assets and related items, and as a result the Company’s financial statements for the year ended December 31, 2022 and throughout fiscal year 2023 could no longer be relied upon. The Company stated the valuation of certain right-of-use (“ROU”) lease assets and related items had not considered relevant impairment indications and related valuation information required by Accounting Standards Codification (“ASC”) No. 842, and related standards. The Company further explained that, though it had recorded one impairment charge once in the third quarter of 2023, no impairment charges were recorded in the other interim financial statements in 2023 or in the 2022 financial statements. The Company disclosed, as a result, it would have to restate certain finances and such restatements would increase the Company’s overall net loss and loss per share in the impacted periods. The Company additionally disclosed that the Company anticipated a review would reveal one or more additional material weaknesses in the Company’s internal control over financial reporting, in addition to the Company’s previously identified and reported material weaknesses. The Company further disclosed that, as a result, it would not timely file its Annual Report for the year ended December 31, 2023. Finally, the Company disclosed the restatement and related items could have an adverse effect upon the Company’s debt, as the Company would now have to seek waivers of noncompliance under the terms of its debt resulting from the accounting errors.

On this news, Sonder’s stock price fell $2.10 per share, or 38.2%, to close at $3.40 per share on March 18, 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) Sonder was not recognizing ROU assets and lease liabilities on its balance sheet in accordance with ASC 842; (2) Sonder’s financial statements contained material errors in the valuation and impairment of operating lease ROU assets; (3) Sonder had undisclosed internal control failures; (4) as a result of the foregoing, Sonder was not in compliance with all financial covenants; and (5) as a result, Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.

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If you purchased or otherwise acquired Sonder securities during the Class Period, you may move the Court no later than June 10, 2024 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.

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