KinderCare Learning Companies Inc ( KLC ) is under fire Thursday following a new report from The Bear Cave, which alleges safety failures, regulatory concerns and a deteriorating reputation at the nation's largest private childcare provider.

What Happened: The Bear Cave released a short report on KinderCare Thursday, alleging the company is plagued by operational failures that could threaten its stock performance.

"Recent investigations reveal alarming safety incidents, including children left unsupervised, instances of abuse and regulatory violations that raise serious concerns about KinderCare's ability to operate responsibly," the short seller said.

Benzinga has reached out to KinderCare Learnings Companies for comment on the report.

Read Also: Apple Stock Slammed By Trump Tariffs: Is A Death Cross Next?

KinderCare operates roughly 1,500 childcare centers across 41 states and relies heavily on government funding. The company went public in 2022, positioning itself as a leader in early childhood education.

The Bear Cave’s report cites troubling incidents, including a case where an 11-month-old tested positive for cocaine at a KinderCare center in Wisconsin. Other reports detail children escaping facilities, being locked inside after closing hours and experiencing mistreatment by staff.

“In sum, The Bear Cave believes KinderCare is a broken business that harms the children and families it claims to help,” the short seller said.

The Bear Cave reported that KinderCare has faced repeated scrutiny from regulatory agencies. The short seller believes growing concerns could impact its ability to secure funding and expand operations.

The short seller also highlighted online complaints from parents and former employees, with some alleging understaffing, inadequate training and neglect.

KLC Price Action: KinderCare shares are falling by 10.8 % during Thursday’s session, trading at $11.40 at the time of publication. According to data from Benzinga Pro, KinderCare has a 52-week high of $29.89 and a 52-week low of $10.91 after making new lows for the year in Thursday’s session.

Read Next:

Trump's Tariffs Prompt China To Vow ‘Countermeasures': Experts See Retaliation Likely