Hims & Hers Faces Investor Lawsuit, Legal Provision of About $60 Million
Key Facts
Hims & Hers Health faces a proposed investor class action over disclosures about business practices, alongside a regulatory case for which it recorded a legal liability provision of about $60 million. The investor lawsuit was filed on September 1, 2026, after the Federal Trade Commission filed its regulatory complaint on July 29, 2026. The lawsuit alleges, according to Bloomberg Law, that the company failed to alert investors to consumer-related practices that later became the subject of government action. Law firm Hagens Berman said in a statement distributed through PR Newswire that those practices exposed the company to heightened regulatory scrutiny and potential charges and penalties. The allegations put disclosures to shareholders at the heart of the investor lawsuit, alongside the government dispute over the company's dealings with consumers.
Utah and California, through the Los Angeles County Counsel's office, joined the Federal Trade Commission in the regulatory lawsuit against the company, according to an FTC statement. The complaint alleges that Hims & Hers misled hundreds of thousands of consumers about its medication subscriptions. The FTC accuses the company of sharing consumers' health information with Meta and Snap as part of its objections to the company's privacy practices. On billing, the FTC says the company charges for prescriptions almost immediately after enrollment forms are submitted, despite promises of a consultation with a healthcare provider. It also accuses the company of making it difficult for consumers to cancel subscriptions, with the government case covering the handling of health information, payment collection and cancellation procedures, according to the allegations in its statement.
Hims & Hers disputed the government's allegations, according to the Associated Press, which cited the company's response to the case. The company described the action as an "attempt to generate headlines at our expense," rejecting the allegations against its business practices. In its privacy statement, the company said it separates information patients share with healthcare providers and excludes it from marketing activities. On the accounting front, the company disclosed in a Securities and Exchange Commission filing that it had recorded a legal liability provision for the regulatory case. The provision stood at about $60 million as of June 30, 2026, according to the disclosure, the amount the company included among its potential liabilities related to the dispute.
The legal disputes come as the company reported higher revenue and subscriber numbers in its second-quarter 2026 results. Revenue totaled about $753 million during the quarter, according to the earnings release issued by Hims & Hers' investor relations department. That represented a 38% increase from the corresponding quarter a year earlier, according to the company's year-on-year comparison. Subscribers rose to nearly 2.9 million over the same period, up 19% year on year. Revenue growth thus outpaced subscriber growth in the reported results, while the regulatory lawsuit addresses practices related to medication subscriptions and the investor lawsuit concerns what the company disclosed about those practices.
In the stock market, the plaintiff's account in the investor lawsuit links the announcement of the regulatory case to a decline in Hims & Hers shares in late July. Bloomberg Law, citing that account, reported that news of the lawsuit caused the share price to fall about 15%. The government action was announced on July 29, 2026, the date the regulatory complaint was filed, according to the case timeline. In the October 19, 2026 session, the company's shares, traded under the ticker HIMS, closed at $28.15, according to historical data published by Investing.com. The stock rose 0.29% that session, following the decline the plaintiff attributes to news of the government lawsuit in July.
The Federal Trade Commission seeks a permanent injunction and monetary relief in its complaint as part of its action against Hims & Hers. California is also seeking injunctions, restitution and civil penalties, according to the complaint, in demands related to the disputed consumer practices. The FTC said "the court will decide the case," while the company maintains its objections to the government's allegations. In the investor lawsuit, Hagens Berman urged investors who suffered losses to contact the firm before the deadline to seek appointment as lead plaintiff. That deadline expires on November 2, 2026, according to the firm's announcement about the proposed class action pending since September.