We are investigating The RealReal, Inc. (REAL) (“RealReal” or the “Company”) for potential violations of the federal securities laws.
In June 2019, RealReal conducted its initial public offering (“IPO”), issuing 17.25 million shares of common stock priced at $20.00 per share. Then, on November 5, 2019, CNBC published an investigate report revealing that RealReal’s authentication process was not as robust as the Company had led consumers to believe. CNBC spoke with “nearly three dozen former employees and obtained internal company documents that show not everything is authenticated by an expert and employees work under strict quotas that lead to fakes being sold on the site.” CNBC’s investigative report also found that copywriters, who received “little training on how to spot fakes and were hired to write descriptions of the items to post on the website,” were tasked with authenticating items that went on the Company’s site. On this news, RealReal’s stock price fell $2.36 per share, or 10.86%, to close at $19.37 per share on November 5, 2019.