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Hims & Hers Health Stock Plummets Amid Securities Fraud Allegations: What Investors Need to Know

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by

Lucy
in

Estimated reading time: 3 minutes

Key Takeaways

  • Hims & Hers Health’s stock plummeted over 34% following allegations of securities fraud and partnership termination with Novo Nordisk.
  • A class action lawsuit has been filed against the company, accusing it of making false statements about regulatory compliance.
  • Upcoming Q2 2025 earnings and ongoing legal proceedings are critical for assessing the company’s future prospects.
  • Despite setbacks, Hims remains active in telehealth, with plans to expand into Canada by 2026.
  • Investors should monitor legal updates, earnings reports, and regulatory developments to evaluate risk and opportunity.

Table of Contents

What Happened?

Stock Market Impact

Legal Fallout

Company Overview and Market Prospects

What Investors Should Watch Next

Conclusion

What Happened?

In late April 2025, Hims & Hers Health, Inc. (NYSE: HIMS), a telehealth and wellness company, announced a collaboration with pharmaceutical giant Novo Nordisk to sell the popular weight loss drug Wegovy on its platform. The drug’s active ingredient, semaglutide, had generated significant public and investor interest. However, by late June 2025, Novo Nordisk abruptly terminated the partnership, citing that Hims had been “deceptively promoting and selling illegitimate, knockoff versions of Wegovy that put patient safety at risk.” The company specifically alleged that Hims violated laws prohibiting mass sales of compounded drugs, undermining regulatory compliance claims previously made by Hims to investors[1].

Stock Market Impact

This announcement triggered a sharp selloff: Hims & Hers stock plunged from $64.22 on June 20 to $41.98 on June 23, marking a decline of more than 34% in just a few days[1]. The volatility reflected investor panic over the future of Hims’ weight loss product offering and regulatory scrutiny.

Adding to investor concerns, a securities fraud class action lawsuit has been filed against Hims, accusing the company of issuing materially false and misleading statements about its partnership and regulatory compliance during the critical period from April 29 to June 23, 2025. Law firms encourage affected shareholders to consider their rights before the August 25, 2025 deadline[2].

Company Overview and Market Prospects

Despite these setbacks, Hims & Hers continues to be a major player in telehealth, offering an array of prescription and wellness products across sexual health, skincare, hair care, and general wellness. The company had projected 2025 revenues in the range of $2.3 billion to $2.39 billion[3].

Moreover, Hims has announced plans to expand operations into Canada in 2026, signaling long-term growth ambitions beyond its current markets[4].

What Investors Should Watch Next

  • Q2 2025 Earnings (to be announced August 4, 2025): The results will provide insight into how the legal and partnership challenges have affected the company’s financial health and future guidance[4].
  • Legal Developments: Ongoing securities fraud litigation and regulatory investigations may impact stock volatility and investor confidence[1][2].
  • Product Pipeline & Compliance: How Hims manages its drug offerings, particularly semaglutide-related products, under regulatory scrutiny will be crucial in restoring trust.

Conclusion

The Hims & Hers saga highlights critical risks in the emerging telehealth space related to regulatory compliance and corporate transparency. While the company has built a strong presence in digital health and wellness, recent controversies have cast a shadow over its growth narrative. Investors should stay informed on legal updates and upcoming earnings to gauge the true impact of the troubled Novo Nordisk partnership and its aftermath.

This post will be updated as new information emerges following Hims & Hers’ Q2 earnings report and ongoing legal proceedings.

FAQ

What is the reason behind Hims & Hers stock decline?

Hims & Hers stock declined over 34% after allegations of securities fraud and the termination of its partnership with Novo Nordisk over the promotion of illegitimate Wegovy versions, leading to regulatory scrutiny and investor panic[1].

What legal actions are being taken?

A securities fraud class action lawsuit has been filed against Hims, accusing it of making false statements about its regulatory compliance during the critical period from April 29 to June 23, 2025. Shareholders are advised to consider their rights before the August 25, 2025 deadline[2].

How will future earnings be affected?

The upcoming Q2 2025 earnings report (announced August 4, 2025) will shed light on how the legal and partnership issues have impacted the company’s financial health and outlook.

What are Hims’ plans for expansion?

Hims plans to expand into Canada in 2026, aiming to grow its telehealth services and market reach beyond current regions[4].