Shares of Hims & Hers Health fell 10% in Wednesday trading after the Federal Trade Commission filed a lawsuit against the telehealth company.
The regulator alleges the firm misled consumers regarding privacy protections, billing practices, and subscription cancellation processes.
Hims & Hers posted a first-quarter net loss of $92 million and issued weaker-than-expected earnings guidance for the year, signaling operational headwinds that have already weighed on investor sentiment.
The suit specifically targets the company's data-sharing arrangements with social media platforms Meta and Snap, as well as its handling of consumer health information.
The legal challenge arrives at a precarious moment for the company, which saw its stock decline sharply in early trading on Tuesday following a disappointing quarterly report.
Hims & Hers posted a first-quarter net loss of $92 million and issued weaker-than-expected earnings guidance for the year, signaling operational headwinds that have already weighed on investor sentiment.
The FTC's intervention highlights growing regulatory scrutiny of digital health platforms and their data monetization strategies.
By alleging that the company obscured how consumer health data was shared with third-party advertisers, the regulator is challenging a core revenue model for many telehealth providers.