Romeo Power Inc.
|Company Name||Romeo Power Inc.|
|Class Period||October 05, 2020 to March 30, 2021|
|Lead Plaintiff Motion Deadline||June 15, 2021|
On March 30, 2021, Romeo announced that, as a result of a significant supply shortage of battery cells, its fiscal 2021 revenue guidance would be reduced by 71-87%. During a related conference call, the Company revealed that it relied solely on Samsung and LG for its supply of power cells, not four different cell suppliers as Romeo had previously stated.
On this news, the Company’s stock price fell $2.04 per share, or 19.7%, to close at $8.33 per share on March 31, 2021, thereby injuring investors.
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 that: (1) Romeo Power had only two battery cell suppliers, not four; (2) the future potential risks that defendants warned of concerning supply disruption or shortage had already occurred and were already negatively affecting Romeo Power’s business, operations and business prospects; (3) Romeo Power did not have the battery cell inventory to accommodate end-user demand and ramp up production in 2021; (4) Romeo Power’s supply constraint was a material hindrance to Romeo Power’s revenue growth; and (5) Romeo Power’s supply chain for battery cells was not hedged, but in fact, was totally at risk and beholden to just two battery cell suppliers and the spot market for their 2021 inventory; and (6) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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