 "KinderCare Stock Slammed In Bear Cave Probe Over Alleged Safety Lapses — Retail Traders Brace For Fallout")
synopsis
The report alleges operational issues that led to several cases of oversight and abuse of toddlers.
KinderCare Learning Companies, Inc. (KLC) shares fell 12.4% on Thursday after a report in the investigative newsletter The Bear Cave alleged safety violations and incidents at its childcare centers.
The report raises concerns over the company's operational practices. KinderCare manages about 1,500 centers in the United States and sold its shares to the public in October 2024.
The report detailed a November 2024 investigation into the Oak Creek KinderCare in Wisconsin, where an 11-month-old tested positive for cocaine after being in the daycare’s care.
The same investigation found prior safety violations at the facility, including staff aggression and undocumented injuries.
It also mentioned a series of safety incidents, including toddlers escaping onto roads nd facing physical, verbal, and sexual abuse.
The Bear Cave is managed by short seller and former equity research analyst Edwin Dorsey and is popular among the investor community.
KinderCare, which is backed by private equity firm Partners Group, has not issued a formal statement regarding the matter.
The company first filed for an IPO in 2021 but dropped the plans at the time.
On Stocktwits, retail sentiment for the company was in the 'bearish' territory and message volume was 'low', unchanged from a day prior.
One user noted that the company's legal costs will shoot up.
Shares of KinderCare closed at $11.19, down 37% year to date.
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