Olaplex beat a hair-loss lawsuit in court and still lost 95% of its value

Olaplex turned a salon-only bond-building chemistry trick into prestige hair care's fastest brand, listing on Nasdaq in late 2021 at $25 and peaking at $29.41 on January 3, 2022. Then demand weakened amid regulatory challenges in 2022, and in early 2023 nearly 30 women sued, alleging the products caused hair loss and damage and citing the ingredient lilial. The company aggressively denied the claims and said it had removed lilial from all of its products; the case was dismissed later that year.

Winning in court didn't win back the bathroom cabinet. The stock sank more than 50% over 2023 and never recovered. In fiscal 2023 US net sales fell 47.8% and net income sank 74.8%, while competitors — K18, Ouai, Redken — crowded into the gap as consumers attacked the brand and its formulations on social media. A brand whose entire promise was 'breakthrough science' was one claim deep on trust, and the allegations went straight at the core.

Late in 2023 Olaplex hired Supergoop's Amanda Baldwin as CEO to relaunch the brand — new products such as a pre-shampoo treatment, deeper customer engagement, a sharper press strategy. The recovery is partial at best: fiscal 2025 net sales rose just 0.1%, and shares sank more than 20% after the fourth-quarter report even though Q4 net sales grew 4.3% to $105.1 million. In January 2026 reports of a takeover offer from Henkel sent the stock up more than 30% — but at under $1.50 a share the company is worth about $1 billion, down nearly 95% since the IPO while the S&P 500 gained more than 50%.

Stock down nearly 95% from its 2021 IPO — from a $29.41 peak to under $1.50; FY2023 US net sales fell 47.8% and net income 74.8%

The flagship formulas contained lilial, an ingredient the company itself chose to strip from every product once it became a liability.

The brand's equity rested on a single science-based promise, so safety allegations struck at the core of the proposition rather than a peripheral claim.

The response was aggressive legal denial, which left the social-media trial running unopposed while rivals marketed into the vacuum.

Prestige distribution multiplied the damage: the same salons and shelves that carried the hype carried the controversy.

When the brand promise is safe, proven science, an ingredient scare is existential, not just legal. Winning in court doesn't win back customers — the verdict that mattered was social media's.

Baldwin's relaunch has stabilised rather than reversed the slide. Canaccord's December survey still ranked Olaplex the top prestige hair brand among 18- to 29-year-olds, and its analyst thinks customers have largely 'moved beyond' the allegations; JPMorgan analysts disagreed in a January 2026 note, forecasting 'a challenging few quarters'. The reported Henkel takeover interest values the recovery question above the brand question — Olaplex declined to comment on the report.