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Array Technologies, Inc.

Case Details

Class Period: October 11, 2020 - May 11, 2021
Date Filed: May 14, 2021
Case Number: 1:21cv04390
Jurisdiction: New York Southern District Court
icon-casetype Case Type: Securities Case
Days Left to
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31

Case Summary

The Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 promulgated thereunder on behalf of all persons and entities who purchased or otherwise acquired Array securities between October 14, 2020 and May 11, 2021, inclusive (the “Class Period”), who were damaged thereby. The Exchange Act claims are brought against Array and certain of the Company’s officers. Separately, the Action asserts claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (the “Securities Act”) on behalf of all persons and entities who purchased or otherwise acquired Array common stock pursuant and/or traceable to the Company’s October 2020 initial public offering, the Company’s December 2020 secondary public offering, or the Company’s March 2021 secondary public offering (collectively, the “Offerings”), and were damaged thereby. In connection with the Offerings, Array filed registration statements and prospectuses with the U.S. Securities and Exchange Commission (the “Offering Materials”). The Securities Act claims are brought against Array, investment banks that acted as underwriters on the Offerings, and Company directors and officers who signed the Offering Materials. ATI Investment Parent, LLC, an Array shareholder who sold substantial amounts of Array stock through the Offerings is also named as a defendant in connection with the Securities Act claims. Array is an Albuquerque, New Mexico-based manufacturer of ground-mounting systems used in solar energy projects. The Company’s principal products are commonly referred to as “trackers.” Trackers are designed to move solar panels throughout the day to maintain an optimal orientation to the sun, which significantly increases their energy production. With respect to the Exchange Act claims, the Action alleges that, throughout the Class Period, 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. Similarly, with respect to the Securities Act claims, the Action alleges that 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. On May 11, 2021, just months after the Offerings, the truth about these mounting costs and their negative impact on the Company’s profits was revealed. On that date, Array 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. On this news, Array’s stock priced dropped $11.49 per share, or 46.1 percent, to close at $13.46 per share on May 12, 2021.

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