Rent the Runway, Inc. Reports Inducement Grant under Nasdaq Listing Rule 5635(C)(4)

Rhea-AI Summary

Rent the Runway (Nasdaq: RENT) granted an inducement award of 802,395 restricted stock units (RSUs) to Dhiren Fonseca, Executive Chair, effective February 27, 2026. The RSUs vest 25% on October 28, 2026, with the remaining 75% vesting in equal quarterly installments through October 28, 2029, subject to continued service.

The award was unanimously approved by the board, including all independent directors, and was granted as an inducement under Nasdaq Listing Rule 5635(c)(4). The award was granted outside the 2021 Incentive Award Plan but is subject to substantially consistent terms.

Key Figures

Inducement RSUs: 802,395 units Initial vesting portion: 25% Remainder vesting portion: 75% +2 more

5 metrics

Inducement RSUs 802,395 units Equity award to Executive Chair effective February 27, 2026

Initial vesting portion 25% Portion of RSUs vesting on October 28, 2026

Remainder vesting portion 75% RSUs vesting in equal quarterly installments through October 28, 2029

Initial vesting date October 28, 2026 25% of inducement RSUs vest subject to continued service

Final vesting date October 28, 2029 Remaining RSUs vest quarterly through this date

Market Reality Check

Price: $6.28 Vol: Volume 33,687 is below th...

low vol

$6.28 Last Close

Volume Volume 33,687 is below the 20-day average of 72,005 (relative volume 0.47). low

Technical Shares at $6.28, trading above the 200-day MA of $5.73 and 38.01% below the 52-week high of $10.13.

Peers on Argus

RENT was modestly down 0.16% pre-news, while apparel peers in momentum like DXLG...

2 Up

RENT was modestly down 0.16% pre-news, while apparel peers in momentum like DXLG and LVLU were up roughly 2–3%. With peers moving higher and RENT slightly lower, this points to stock-specific trading rather than a sector-wide move.

Historical Context

4 past events · Latest: Dec 12 (Positive)

Pattern 4 events

Date	Event	Sentiment	Move	Catalyst
Dec 12	Q3 2025 earnings	Positive	+18.1%	Reported Q3 2025 growth and one-time gain after recapitalization.
Nov 21	Earnings date notice	Neutral	+3.5%	Announced Q3 2025 earnings release date and conference call details.
Oct 28	Recap closing	Positive	-1.5%	Closed recapitalization, reduced debt to <b>$120M</b> and extended maturity.
Sep 11	Q2 2025 earnings	Neutral	-36.4%	Shared Q2 2025 results and outlined major recapitalization plan.

Pattern Detected

Recent news linked to recapitalization and earnings has triggered both strong gains and steep declines, indicating mixed and event-specific reactions rather than a consistent pattern.

Recent Company History

Over the past six months, Rent the Runway focused on recapitalizing its balance sheet and growing revenue. Q2 and Q3 2025 results highlighted revenue growth and subscriber gains, alongside a plan to cut debt from $340M to $120M and extend maturities to 2029. The recapitalization closing on Oct 28, 2025 and subsequent Q3 2025 earnings on Dec 12, 2025 produced sharply different price reactions. Today’s inducement RSU grant to the Executive Chair fits into a broader use of equity compensation for leadership and directors.

Market Pulse Summary

This announcement details an inducement grant of 802,395 RSUs to Rent the Runway’s Executive Chair u...

Analysis

This announcement details an inducement grant of 802,395 RSUs to Rent the Runway’s Executive Chair under Nasdaq Listing Rule 5635(c)(4), vesting through October 28, 2029. It follows prior RSU awards to directors and senior executives disclosed in December 2025 Form 4 filings, reinforcing equity-based compensation as a key governance tool. Investors may track future disclosures on total RSU grants, leadership changes, and subsequent earnings updates to understand how incentives align with long-term performance and the post-recapitalization trajectory.

Key Terms

restricted stock units, rsus, nasdaq listing rule 5635(c)(4)

3 terms

restricted stock units financial

"The inducement award is comprised of 802,395 restricted stock units in respect..."

Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.

rsus financial

"The RSUs will vest as to 25% of the shares underlying the RSUs on October 28..."

RSUs, or restricted stock units, are a form of company shares given to employees as part of their compensation. They are typically awarded with certain restrictions, such as a waiting period before they can be fully owned or sold, similar to earning a gift that becomes fully yours over time. For investors, RSUs can impact a company's stock offerings and reflect how much the company relies on stock-based incentives to attract and retain talent.

nasdaq listing rule 5635(c)(4) regulatory

"...material to Mr. Fonseca entering into employment with Rent the Runway in accordance with Nasdaq Listing Rule 5635(c)(4)."

NASDAQ Listing Rule 5635(c)(4) is a rule that requires a company to get approval from its shareholders before selling a large amount of its shares, usually over 20%. This helps protect investors by making sure the company doesn't flood the market with new shares without their say, which could lower the stock's value.

AI-generated analysis. Not financial advice.

NEW YORK, Feb. 27, 2026 (GLOBE NEWSWIRE) -- Rent the Runway, Inc. (“Rent the Runway”) (Nasdaq: RENT) announced today the grant of an inducement award to Dhiren Fonseca, the Executive Chair of Rent the Runway’s Board of Directors, effective February 27, 2026. 

The inducement award is comprised of 802,395 restricted stock units in respect of Rent the Runway’s Class A common stock (“RSUs”). The RSUs will vest as to 25% of the shares underlying the RSUs on October 28, 2026, with the remaining 75% of the RSUs vesting in equal quarterly installments through October 28, 2029, subject to continued service through the applicable vesting date.

The inducement award was unanimously approved by Rent the Runway’s Board of Directors, including all independent directors, and was made as an inducement material to Mr. Fonseca entering into employment with Rent the Runway in accordance with Nasdaq Listing Rule 5635(c)(4). While the inducement award was granted outside of Rent the Runway’s Second Amended and Restated 2021 Incentive Award Plan, the award is subject to terms and conditions substantially consistent with those set forth under such plan.

About Rent the Runway, Inc.
Founded in 2009, Rent the Runway is disrupting the trillion-dollar fashion industry and changing the way women get dressed through the Closet in the Cloud. RTR’s mission has remained the same since its founding: powering women to feel their best every day. Through RTR, customers can subscribe, rent items a-la-carte and shop resale from hundreds of designer brands. The Closet in the Cloud offers a wide assortment of millions of items for every occasion, from evening wear and accessories to ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear and ski wear. RTR has built a two-sided discovery engine, which connects deeply engaged customers and differentiated brand partners on a powerful platform built around its brand, data, logistics and technology.

Media Contact
Press
press@renttherunway.com 

FAQ

What inducement award did Rent the Runway (RENT) grant to Dhiren Fonseca on February 27, 2026?

Rent the Runway granted 802,395 RSUs to Dhiren Fonseca as an inducement award. According to Rent the Runway, the award is effective February 27, 2026 and was approved unanimously by the board, including all independent directors.

When do the 802,395 RSUs for RENT vested for Dhiren Fonseca?

The RSUs vest 25% on October 28, 2026, then the remaining 75% vest quarterly through October 28, 2029. According to Rent the Runway, vesting is subject to continued service through each applicable vesting date.

Why was the inducement award to Dhiren Fonseca for RENT made under Nasdaq Rule 5635(c)(4)?

The award was made as an inducement material to Mr. Fonseca entering employment under Nasdaq Rule 5635(c)(4). According to Rent the Runway, the grant complies with that rule and was approved by the board, including independent directors.

Is the RENT inducement award part of Rent the Runway's 2021 Incentive Award Plan?

No, the award was granted outside the Second Amended and Restated 2021 Incentive Award Plan. According to Rent the Runway, the award is subject to terms substantially consistent with that plan.

How will the RENT RSU vesting schedule affect Dhiren Fonseca's service requirement?

Vesting requires continued service through each vesting date, starting October 28, 2026. According to Rent the Runway, 25% vests on that date, with the remainder vesting in equal quarterly installments through October 28, 2029.

Was the RENT inducement award approved by independent directors and when was it effective?

Yes, the award was unanimously approved, including all independent directors, and is effective February 27, 2026. According to Rent the Runway, the board’s unanimous approval accompanied the inducement grant.