Romeo Power Inc. Class Action Lawsuit
- Company Name
- Romeo Power Inc.
- Stock Symbol
- RMO; RMO.WT
- Class Period
- October 5, 2020 to March 30, 2021
- Motion Deadline
- June 15, 2021
- Southern District of New York
The Romeo Power Inc. class action lawsuit charges Romeo Power and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent all persons and entities who purchased the publicly traded securities of Romeo Power during the period October 5, 2020 through March 30, 2021, inclusive (the “Class Period”). The Romeo Power class action lawsuit was commenced on April 16, 2021 in the Southern District of New York and is captioned Nichols v. Romeo Power, Inc., No. 21-cv-03362.
Founded in 2016, Romeo Power purports to be an industry leading energy technology company focused on designing and manufacturing lithium-ion battery modules and packs for commercial electric vehicles. Romeo Power asserts that through its industry leading energy dense battery modules and packs, it enables large-scale sustainable transportation by delivering safe, longer lasting batteries with shorter charge times. Romeo Power’s core product offering purportedly serves the battery electric vehicle (BEV) medium duty short haul and heavy duty long haul trucking markets, as well as specialty trucking and buses.
On February 12, 2019, RMG Acquisition Corp. (“RMG”), a New York City-based special purpose acquisition company, or SPAC, announced that it closed its initial public offering of 20 million units at $10 per share, resulting in gross proceeds of $200 million. RMG was formed by defendants D. James Carpenter, Robert Mancini, and Philip Kassin, and was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses in the diversified resources and industrial materials sectors. On October 5, 2020, RMG announced a definitive agreement for a business combination with defendant Romeo Power that would result in Romeo Power becoming a publicly listed company.
The Romeo Power class action lawsuit alleges that, throughout the Class Period, Romeo Power was suffering from an acute shortage of high quality battery cells, which are key raw materials for Romeo Power’s battery packs and modules, due to supply constraints. Specifically, according to the Romeo Power class action lawsuit, contrary to defendants’ representations: (i) Romeo Power had only two battery cell suppliers, not four; (ii) the future potential risks that defendants warned of concerning supply disruption or shortage had already occurred and were already negatively affecting Romeo Power’s business, operations, and prospects; (iii) Romeo Power did not have the battery cell inventory to accommodate end-user demand and ramp up production in 2021; (iv) Romeo Power’s supply constraint was a material hindrance to Romeo Power’s revenue growth; and (v) Romeo Power’s supply chain for battery cells was not hedged, but in fact, was totally at risk and beholden to just two battery cell suppliers and the spot market for their 2021 inventory. The Romeo Power class action lawsuit further alleges that given the supply constraint that Romeo Power was experiencing during the Class Period, defendants had no reasonable basis to represent that Romeo Power had the ability to meet customer demand and that it would support growth in revenue in 2021.
On March 30, 2021, Romeo Power disclosed that Romeo Power’s production had been hampered by a shortage in supply of battery cells and that its estimated 2021 revenue would therefore be reduced by approximately 71%-87%. On this news, the price of Romeo Power’s shares declined almost 20%, damaging investors.
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The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Romeo Power securities during the Class Period to seek appointment as lead plaintiff in the Romeo Power 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 Romeo Power class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Romeo Power class action lawsuit. An investor’s ability to share in any potential future recovery of the Romeo Power action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Romeo Power class action lawsuit or have questions concerning your rights regarding the Romeo Power class action lawsuit, please provide your information here or contact counsel, J.C. Sanchez of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at firstname.lastname@example.org. Lead plaintiff motions for the Romeo Power class action lawsuit must be filed with the court no later than June 15, 2021.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For eight consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.