Stitch Fix(US:SFIX) Prnewswire·2025-07-28 12:00Core Viewpoint - Stitch Fix, Inc. is facing legal scrutiny regarding alleged false statements about its Freestyle business segment and significant insider stock sales totaling $132 million, which may have misled investors and inflated stock prices [1][2][3] Legal Developments - A U.S. District Court judge ruled that claims in a securities fraud lawsuit against Stitch Fix and its former CEO can proceed, indicating that the company may have misled investors about the Freestyle segment's impact on its core business [2] - The lawsuit alleges that from June 2020 to June 2022, Stitch Fix made false statements regarding the Freestyle segment, which purportedly led to artificially inflated stock prices [2] Financial Impact - Following the revelation in June 2022 that the Freestyle segment had negatively affected potential new Fix customers and the announcement of a 15% workforce reduction, Stitch Fix's stock price dropped by 27% [2]