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Investing.com -- Shares of KinderCare Learning Companies (NYSE: KLC) tumbled 12% after the company was mentioned cautiously by short seller Bear Cave. The report highlighted a series of safety violations and incidents at KinderCare daycare centers, raising concerns about the company’s operational practices.
The Bear Cave’s investigation revealed multiple instances where KinderCare facilities allegedly failed to provide a safe environment for children. The report includes 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.
Furthermore, the report detailed several other disturbing incidents across various states, including toddlers escaping onto busy roads, being left alone locked inside buildings and buses, and facing physical, verbal, and sexual abuse. Some of these cases reportedly went unreported until external parties intervened or evidence surfaced online.
The Bear Cave’s findings suggest a pattern of negligence and have led to public outcry, with one top YouTube comment stating, "KinderCare needs to be closed permanently," and others indicating that these issues are widespread across the company’s locations.
The negative sentiment from the Bear Cave report has clearly impacted investor confidence, resulting in the significant drop in KinderCare’s stock price. The company has not yet issued a formal response to the allegations detailed in the Bear Cave’s report.
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