Kirby McInerney LLP Announces the Filing of a Securities Class Action on Behalf of Shoals Technologies Group, Inc. (SHLS) Investors
Investors have until May 21, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Middle District of Tennessee on behalf of those who acquired Shoals Technologies Group, Inc. (“Shoals” or the “Company”) (NASDAQ: SHLS) securities during the period of May 17, 2022 through November 7, 2023, inclusive (“the Class Period”). Investors have until May 21, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
[Click here to learn more about the class action]
On May 8, 2023, Shoals filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission (“SEC”) for the first quarter of 2023 which informed investors of a potential issue involving “a subset of wire harnesses” which presented “excessive pull back of wire insulation at connection points,” which Shoals dubbed “shrinkback.” Shoals sought to ease investors’ concerns by reporting that it had “substantially ceased use of the related wire.”
On November 7, 2023, Shoals filed its quarterly report on Form 10-Q for the third quarter of 2023 with the SEC and held an earnings call with investors in which the Company revealed that wire shrinkback affected 30% of Shoals’ harnesses installed between 2020 and 2022, an issue far more severe than previously disclosed. Additionally, Shoals booked a $50.2 million warranty expense for the quarter related to the shrinkback issue and provided a range of potential loss related to the shrinkback issue of $59.7 million to $184.9 million. On this news, the price of Shoals’ shares declined by $3.28 per share, or approximately 20.20%, from $16.23 on November 7, 2023 to close at $12.95 on November 9, 2023.
The lawsuit alleges that during the Class Period, Shoals failed to disclose that: (1) Shoals had received reports of exposed copper conduit in EBOS wire harnesses in numerous solar fields and was aware that a significant portion of its wire harnesses had defects by 2022; (2) Shoals would have to incur between $60 million to $185 million in costs to remediate the wire shrinkback issue; and (3) Shoals had understated its cost of revenue by millions of dollars.
If you purchased or otherwise acquired Shoals securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at [email protected], or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
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