May 14, 2021 - An investor in shares of Array Technologies, Inc. (NASDAQ: ARRY), filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Array Technologies, Inc. in connection with certain allegedly false and misleading statements made between October 14, 2020 and May 11, 2021.
Albuquerque, MA based Array Technologies, Inc. manufactures and supplies solar tracking systems and related products for customers in the United States and internationally.
Array Technologies, Inc. reported that its annual Total Revenue rose from $647.89 million in 2019 to $872.66 million in 2020, and that its Net Income increased from $39.74 million in 2019 to $59.07 million in 2020. On or about October 15, 2020, Array Technologies, Inc sold about 47.5 million shares of stock in its initial public stock offering (the "IPO") at $22.00 a share, raising nearly $1 billion in new capital.
On May 11, 2021, Array Technologies, Inc reported first quarter 2021 results that missed profit analysts' expectations and withdrew its full-year 2021 outlook citing increases in steel and freight costs. Analysts immediately cut their ratings on Array stock citing concerns about the Company's shrinking profit margins. For example, in a Barclays report, analysts downgraded Array stock from "Overweight" to "Underweight" noting concerns about volumes, margins, and earnings power. Shares of Array Technologies, Inc. (NASDAQ: ARRY) declined on May 12, 2021, to as low as $13.22 per share.
According to the complaint the plaintiff alleges on behalf of purchasers of Array Technologies, Inc. (NASDAQ: ARRY) common shares between October 14, 2020 and May 11, 2021, that the defendants violated Federal Securities Laws.
More specifically, the plaintiff claims that between October 14, 2020 and May 11, 2021, the Defendants made false and misleading statements because they omitted and otherwise failed to disclose that, dating back to the first quarter of 2020, prices of certain commodities such as steel was in the process of more than doubling, and that Array was facing increasing freight costs. As a result of the foregoing, the Company's positive statements about its business and operations lacked a reasonable basis.
In addition, the company conducted secondary public offerings in December 2020 and March 2021In connection with these secondary Offerings, Array filed registration statements and prospectuses with the U.S. Securities and Exchange Commission (the "Offering Materials"). The plaintiff claims that Array, certain investment banks that acted as underwriters on the Offerings, and certain Company directors and officers the Offering Materials contained false and misleading statements because they omitted and otherwise failed to disclose that, prior to the Offerings, increases in commodity and freight costs had been negatively impacting the Company's business and operations.