A securities class action has been filed against KinderCare Learning Companies, Inc. (KLC) on behalf of investors who purchased the Company’s securities pursuant and/or traceable to the Company’s Offering Documents issued in connection with its initial public offering (“IPO”) conducted in October 2024. This case has been filed in the USDC – SDNY.
On or around October 9, 2024, KinderCare conducted its initial public offering (“IPO”) of 27 million shares of stock priced at $24 per share. Then, on April 3, 2025, research analyst Edwin Dorsey published a report about KinderCare titled “Problems at KinderCare Learning Companies (KLC)” in a newsletter known as “The Bear Cave” (the “Bear Cave Report”). The Bear Cave Report alleged, among other things, that “KinderCare often fails to deliver the safe and nurturing environment it promises parents and taxpayers. The Bear Cave finds that toddlers escape from the KinderCare daycares onto busy roads, are left alone locked inside KinderCare buildings and buses, and are physically, verbally, and sexually abused, with many cases going unreported until bystanders raise alarm or video evidence circulates. In sum, The Bear Cave believes KinderCare is a broken business that harms the children and families it claims to help.” Then, on April 24, 2025, online magazine Evie issued an article titled “Why Are Babies Testing Positive For Cocaine At The Nation’s Biggest Daycare Chain?” The article described the Bear Cave Report as a “damning new investigative report [that] has pulled back the curtain on what might be the worst scandal in America’s childcare system at KinderCare.” Finally, on June 5, 2025, Edwin Dorsey published a follow-up report in The Bear Cave titled “More Problems at KinderCare (KLC)” (the “Second Bear Cave Report”). The Second Bear Cave Report noted: “Now these concerns are entering the mainstream, allegations against the company are growing, [and] lawmakers are demanding accountability . . . .”Since the IPO, the price of KinderCare stock has fallen to lows near $9 per share – substantially less than half the $24 per share IPO price.