YayYo, Inc. Class Action Lawsuit
- Company Name
- YayYo, Inc.
- Stock Symbol
- Class Period
- Pursuant and/or traceable to the registration statement and related prospectus issued in connection with YayYo’s November 14, 2019 initial public offering
- Central District of California
The YayYo, Inc. class action lawsuit charges YayYo, certain of its officers and directors, and the underwriters of its November 14, 2019 initial public offering (“IPO”) with violations of the Securities Act of 1933. Filed in the Central District of California and commenced on September 9, 2020, the YayYo class action lawsuit seeks to represent purchasers or acquirers of YayYo securities pursuant and/or traceable to the registration statement and related prospectus issued in connection with YayYo’s IPO (collectively, the “Registration Statement”) and is captioned Hamlin v. YayYo, Inc., No. 20-cv-08235.
YayYo, through its subsidiaries, purports to operate an online peer-to-peer booking platform that rents standard passenger vehicles to self-employed ridesharing drivers and manages a fleet of standard passenger vehicles to be rented directly to drivers in the ridesharing economy. Due to his alleged checkered past, YayYo’s founder and former CEO, defendant Ramy El-Batrawi, resigned from all of his YayYo positions in September 2019 at the insistence of NASDAQ so that YayYo could be taken public. In November 2019, defendants held the IPO, issuing approximately 2,625,000 YayYo shares to the investing public at $4.00 per share pursuant to the Registration Statement.
The YayYo class action lawsuit alleges that the IPO Registration Statement contained misleading statements in that, among other things: (1) defendant El-Batrawi continued to exercise supervision, authority, and control over YayYo and was intimately involved, on a day-to-day basis, with the business, operations, and finances of YayYo, including assisting the IPO’s underwriters in marketing YayYo’s IPO; (2) defendant El-Batrawi never sold his 12,525,000 “Private Shares” and continued to own a controlling interest in YayYo despite the NASDAQ’s insistence that he retain less than a 10% equity ownership interest in connection with the listing agreement; (3) defendants promised certain creditors of YayYo that in exchange to their agreeing to purchase shares in the IPO – in order to permit the IPO’s underwriters to close the IPO – YayYo would repurchase those shares after the IPO; (4) defendants intended to repurchase shares purchased by creditors of YayYo in the IPO using IPO proceeds; (5) YayYo owed its former President, CEO, and director a half million dollars at the time of the IPO; (6) YayYo owed its social media company SRAX, Inc. $426,286 in unpaid social media costs, most of which were more than a year overdue, as payment had been delayed while YayYo attempted to complete its IPO; and (7) as a result, defendants’ statements about YayYo’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
As a result of the disclosure of the various above-referenced material adverse facts that were omitted from YayYo’s Registration Statement, YayYo’s stock price has fallen significantly below its IPO price. As of the filing of the YayYo class action lawsuit, YayYo’s stock traded at approximately $0.40 per share, a 90% decline from the price the stock was offered at in the IPO.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.