According to the law firm press release, on August 9, 2016, SunPower issued a press release announcing its second quarter 2016 financial results. Therein, the Company disclosed the existence of several factors negatively impacting the Company’s performance, including “customers adopting a longer-term timeline for project completion,” “aggressive [Power Purchase Agreement (“PPA”)] pricing by new market entrants,” and “continued market disruption in the YieldCo environment.” The Company also announced a manufacturing realignment which the Company stated would result in restructuring charges totaling $30-$45 million, a substantial portion of which would be incurred in the third quarter of 2016. Finally, the Company disclosed that, as a result of these “challenges,” it was substantially decreasing its fiscal year 2016 guidance—expecting a net loss of $175 million to $125 million, rather than the earlier-forecasted net income of $0 to $50 million.
On this news, SunPower’s stock price fell $4.47 per share, or 30%, to close at $10.31 per share on August 10, 2016, on unusually heavy trading volume.
The complaint charges SunPower and certain of its officers with violations of the federal securities laws. Specifically, the complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose: (1) that a substantial number of the Company’s customers were adopting a longer-term timeline for project completion; (2) that the Company’s near-term economic returns were deteriorating due to aggressive PPA pricing by new market entrants; (3) that market disruption in the YieldCo environment was impacting the Company’s assumptions related to monetizing deferred profits; (4) that, as such, demand for the Company’s products was significantly declining; (5) that, in response, the Company would implement a manufacturing realignment that would result in significant restructuring charges; (6) that, as such, the Company’s fiscal year 2016 guidance was overstated; and (7) that, as a result of the foregoing, Defendants’ statements about SunPower’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
On December 9, 2016, the Court appointed Lead Plaintiff and Counsel. This Lead Plaintiff and Counsel withdrew on May 15, 2017.
New Lead Plaintiffs and Counsel were appointed on August 21, 2017. An amended Complaint was filed on October 17. Defendants filed a Motion to Dismiss the amended Complaint on December 18. On April 18, 2018, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to file an amended Complaint. Lead Plaintiffs filed a second amended Complaint on May 8. On June 14, Defendants filed a Motion to Dismiss the amended Complaint. On October 9, the Court issued an Order granting Defendants' Motion to Dismiss.