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ChargePoint Holdings, Inc.

Company NameChargePoint Holdings, Inc.
Stock SymbolCHPT
Class PeriodJune 01, 2023 to November 16, 2023
Lead Plaintiff Motion DeadlineJanuary 29, 2024

On September 6, 2023, after the market closed, ChargePoint reported its second quarter fiscal year 2024 financial results, including an “$28.0 million, or 19 percentage point, inventory impairment charge.” The Company stated the “inventory impairment charge was taken to address legacy supply chain-related costs and supply overruns on a particular DC product.” As a result, the Company reported a second quarter GAAP gross margin of 1%, down from 17% in the prior year’s same quarter.

On this news, the Company’s share price fell $0.77, or 11%, to close at $6.29 per share on September 7, 2023, on unusually heavy trading volume.

 

Then, on November 16, 2023, after the market closed, ChargePoint released preliminary financial results for the third quarter of fiscal year 2024, which would include an “additional non-cash inventory impairment charge” in the amount of $42 million “related to product transitions and to better align inventory with current demand.” As a result, the Company expected to report “GAAP gross margin of negative 23% to negative 21%.”  The Company also reported revenue had fallen to “$108 million to $113 million, as compared to $150 to $165 million as previously expected.” Moreover, ChargePoint’s Chief Executive Officer and Chief Financial Officer were both replaced, effective immediately.  

 

On this news, the Company’s share price fell $1.11, or 35%, to close at $2.02 per share on November 17, 2023, on unusually heavy trading volume.

 

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company was experiencing higher component costs and supply overruns for first generation DC charging products; (2) that, as a result, the Company was likely to incur impairment charges; (3) that, as a result of the foregoing, the Company’s profitability would be adversely impacted; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

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