- Company Name
- Livent Corporation
- Stock Symbol
- Class Period
- Purchasers of Livent securities pursuant to the Company’s October 2018 initial public offering
- Motion Deadline
- July 21, 2019
- Eastern District of Pennsylvania
The complaint charges Livent, certain of its officers and directors and the underwriters of its October 2018 initial public offering (“IPO”) with violations of the Securities Act of 1933. Livent produces and distributes high performance lithium chemicals, including battery-grade lithium hydroxide, butyllithium, and high purity lithium metal. Livent generates over 85% of its revenues from the sale of performance lithium compounds, primarily lithium hydroxide, for use in the electric vehicle battery market.
In October 2018, Livent completed its IPO, selling 23 million shares of common stock at $17.00 per share pursuant to a Registration Statement filed with the SEC on October 1, 2018 and declared effective on October 10, 2018.
The complaint alleges that the Registration Statement filed in connection with the IPO was false and misleading and omitted to state material adverse facts. Specifically, defendants failed to disclose in the Registration Statement that a supply contract with Nemaska Lithium Inc. had been terminated, which would force Livent to fulfill its customer contracts using alternative vendors at reduced revenues and lower margins; that the Company had a long-standing contract to supply lithium hydroxide to a customer at a much lower price than any of the Company’s existing contracts; and that the Company’s margins were being squeezed due to that customer’s increased orders.
On February 11, 2019, Livent released fourth quarter 2018 financial results that missed top line sales targets, citing difficulties negotiating contracts with existing customers. On this news, Livent’s share price fell $0.57 per share, or over 4%, to close at $12.55 per share on February 12, 2019. Then on May 8, 2019, the Company announced disappointing financial results for first quarter of 2019, citing further customer issues. On this news, the price of Livent stock fell $1.70 per share to close at $9.03 per share on May 8, 2019, a one-day decline of 16% and a decline of 46% from the stock’s offering price in the IPO.