The Pomerantz Law Firm has brought a class action lawsuit against Singapore-headquartered solar manufacturer Maxeon Solar Technologies concerning whether “Maxeon and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.”
Pomerantz – which specialises in representing investors – announced the case in the US this week to Maxeon shareholders who purchased their shares between 15th November 2023 and May 29th 2024.
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The case specifically refers to Maxeon’s delayed Q1 2024 financial results, which it filed on 30th May this year. It reported US$14.9 million in losses and a 41% year-on-year drop in revenue to US$187.45 million.
It also announced that it required “additional capital to support its continuing operations”, which came through investments from the company’s majority shareholder, TCL Zhonghuan Renewable Energy Technology (TZE); US$97.5 million in debt financing and a US$100 million equity investment.
Maxeon said this move would result in “substantial dilution to existing public shareholders, with TZE ultimately becoming a controlling shareholder,” Pomerantz said.
In its statement on the case, Pomerantz added that the financial results caused Maxeon’s stock price to fall US$1.08 per share, or 34.7%, to close at US$2.03 per share on 30th May, 2024. This allegedly caused damages to investors in the company.
Prior to the financial statement on 30th May, Maxeon had been notified of non-compliance by the NASDAQ stock exchange in the US over failure to submit its financial reports on time.
In a separate statement, the Rosen Law Firm – another US firm – said: “According to the lawsuit, defendants made false and/or misleading statements and/or failed to disclose that: (1) Maxeon relied on the exclusive sales of certain products to SunPower Corp.; (2) following the termination of the Master Supply Agreement, a supply agreement between Maxeon and SunPower, Maxeon was unable to “aggressively ramp sales”; (3) as a result, revenue substantially declined; (4) as a result, Maxeon suffered a “serious cash flow” crisis; and as a result of the foregoing, defendants’ positive statements about Maxeon’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.”
PV Tech Premium interviewed Maxeon CEO Bill Mulligan last month and he spoke about the company’s deal with SunPower: “we lost our biggest customer [in the US], which was SunPower – we were pretty much the sole source for SunPower.”
He said that the deal broke down “partly [because of] cost and partly how SunPower changed their strategy…there was a lot of tension there, and we agreed on a settlement to terminate the contract, and we’re going our separate ways.”
The final motion deadline for the case is the 26th August 2024.
