On August 9, 2022, Plug announced its financial results for the second quarter of 2022, assuring investors that the company had a “Strong Business Outlook” and touting a $15 billion sales funnel. Defendants also emphasized that Plug’s supply chain was strong—with its Chief Executive Officer stating that he did “not foresee supply chain issues this year”—and that Plug’s rapidly growing inventory was simply attributable to the substantial growth Plug would experience in the second half of 2022. Consistent with these representations, Defendants projected that Plug would generate 2022 revenue between $900 million and $925 million, representing approximately 80% year-over-year growth.
Just a few months later, however, on October 14, 2022, investors began to learn the truth when Plug warned that full-year revenue could be 5% to 10% lower than previously projected. Defendants attributed the revenue revision to “some larger projects potentially being completed in 2023 instead of 2022 due to timing and broader supply chain issues.” On this news, the price of Plug common stock declined $1.20 per share, or more than 6%, from a close of $19.23 per share on October 13, 2022, to close at $18.03 per share on October 14, 2022.
About three weeks later, on November 8, 2022, Plug reported its financial results for the third quarter of 2022, reporting a decrease in gross margins and a further increase in inventory levels. On this news, the price of Plug common stock declined $0.20 per share, or more than 1%, from a close of $14.81 per share on November 8, 2022, to close at $14.61 per share on November 9, 2022.
On January 25, 2023, despite Defendants’ previous assurances that revenue growth would be at least 60% on a year-over-year basis, Plug revealed that it now expected to generate year-over-year revenue growth of just 45% to 50% in 2022. Defendants explained that this disappointing result “had to do with the fact that the new products came out a little slower than we hoped,” as Plug’s “[m]anufacturing had a few more issues than we hoped” and “added . . . complexity to supply chain.” Following this revelation, the price of Plug common stock declined $0.97 per share, or approximately 6%, from a close of $16.34 per share on January 25, 2023, to close at $15.37 per share on January 26, 2023.
Then, after the market closed on March 1, 2023, Plug announced its financial results for the fourth quarter and full year 2022, including full-year revenue growth of just 40% on a year-over-year basis—missing even the reduced guidance range provided just a few weeks prior. On this news, the price of Plug common stock declined $0.88 per share, or more than 6%, from a close of $14.21 per share on March 1, 2023, to close at $13.33 per share on March 2, 2023.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about Plug’s business and operations. Specifically, Defendants misrepresented and/or failed to disclose that Plug was unable to effectively manage its supply chain and product manufacturing, resulting in reduced revenues and margins, increased inventory levels, and several large deals being delayed until at least 2023, among other issues. As a result, Defendants’ statements about the company’s business, operations, prospects, and ability to effectively manage its supply chain and production lacked a reasonable basis.