Aterian, Inc. Class Action Lawsuit

Company Name
Aterian, Inc.
Stock Symbol
Class Period
December 1, 2020 to May 3, 2021
Motion Deadline
July 12, 2021
Southern District of New York
24 days left to seek lead plaintiff status

Case Summary

The Aterian, Inc. class action lawsuit charges Aterian (formerly known as Mohawk Group Holdings, Inc.) and its top executives with violations of the Securities Exchange Act of 1934 and seeks to represent all investors who purchased or otherwise acquired Aterian securities between December 1, 2020 and May 3, 2021, inclusive (the “Class Period”).  The Aterian class action lawsuit was commenced on May 13, 2021 in the Southern District of New York and is captioned Tate v. Aterian, Inc., No. 21-cv-4323.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Aterian securities during the Class Period to seek appointment as lead plaintiff in the Aterian class action lawsuit.  A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.  A lead plaintiff acts on behalf of all other class members in directing the Aterian class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Aterian class action lawsuit.  An investor’s ability to share in any potential future recovery of the Aterian action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the Aterian class action lawsuit or have questions concerning your rights regarding the Aterian class action lawsuit, please provide your information here or contact counsel, Michael Albert of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at malbert@rgrdlaw.com.  Lead plaintiff motions for the Aterian class action lawsuit must be filed with the court no later than July 12, 2021.

Aterian is a “technology-enabled consumer products platform that builds, acquires and partners with e-commerce brands.”  Aterian predominantly operates through online retail channels such as Amazon and Walmart, Inc.  On December 1, 2020, Aterian announced that it had acquired the assets of “leading e-commerce business brands Mueller, Pursteam, Pohl and Schmitt, and Spiralizer” from 9830 Macarthur LLC, ZN Direct LLC, and Reliance Equities Group, LLC.

The Aterian class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) Aterian’s organic growth was plummeting; (ii) Aterian’s recent, self-lauded acquisitions were overpayments for flawed assets from questionable sources; (iii) Aterian’s purported artificial intelligence software was a flawed product that lacks customer interest; (iv) Aterian used rebate programs and paid for artificial reviews to pump up their product offerings; and (v) as a result, Aterian’s public statements were materially false and misleading at all relevant times.

On May 4, 2021, analyst Culper Research published a scathing report entitled: “Aterian (ATER): Bought from Felons & Fraudsters, Sold to You.”  In this report, Culper wrote that Aterian “has ties to convicted criminals and is promoting what we believe is an overhyped ‘AI’ narrative and a string of garbage acquisitions to mask the failure of its already ill-conceived core business.”  Culper continued that “Aterian has been largely unsuccessful in convincing other Amazon sellers to pay for its ‘AIMEE’ AI platform, and at least 5 former employees and a former customer have expressed doubts regarding AIMEE’s legitimacy.  We think that Aterian’s underlying business has failed, forcing [Aterian] to obscure its poor performance with a series of questionable acquisitions.”  Culper further wrote: “We believe that there are serious problems with Aterian’s claims to maintain strong organic growth and to drive M&A synergies: to us, neither of these appears to be the case. . . .  In our view, this suggests not only that Aterian is unable to growth EBITDA at acquired businesses, but that its core business is also failing to produce.”  On this news, the price of Aterian stock fell by approximately 24% the following two trading days, damaging investors.

With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm.

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