NEW YORK, Feb. 06, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Microvast Holdings, Inc. (NASDAQ: MVST) on behalf of long-term stockholders following a class action complaint that was filed against Microvast on December 5, 2023 with a Class Period from October 19, 2022 to November 20, 2023. Our investigation concerns whether the board of directors of Microvast have breached their fiduciary duties to the company.
In October 2022, the United States Department of Energy (“DOE”) conditionally selected Microvast for a proposed $200 million grant to help fund a proposed polyaramid separator production facility (the “Grant”). Polyaramid is a high-temperature resistant synthetic polymer, and a polyaramid separator is an insulating film used in high-capacity lithium-ion batteries.
On May 22, 2023, after the market closed, Reuters reported the DOE would not award Microvast the Grant. In a call with congressional staff that evening, the DOE confirmed negotiations with Microvast concerning the Grant had been cancelled. A spokesperson for the DOE stated “[t]he department can confirm that it has elected to cancel negotiations and not to award Microvast funds from this competitive funding opportunity.” The DOE stated it would not comment publicly on why it decided to cancel negotiations with any applicant but did state “the Department of Energy maintains a rigorous review process prior to the release of any awarded funds, and it is not uncommon for entities selected to participate in award negotiations under a DOE competitive funding opportunity to not ultimately receive an award[.]” This news came after months of political fervor over the Company’s alleged ties to China.
On this news, the Company’s share price fell $0.80, or 36%, to close at $1.40 per share on May 23, 2023, on unusually heavy trading volume.
Then, on November 21, 2023, at approximately 9:00 a.m., J Capital Research published a report on Microvast entitled “MVST: Empty Facilities and a Grant Loss That Was Probably Hidden: Another China Hustle” (the “Report”). The Report alleged the Company knew the Grant had been rescinded for months prior to Reuters reporting but failed to inform investors. The Report alleged further that “the majority of MVST’s sales may be fake,” that “Chinese customers account for 57% of revenue in 2023” but drone footage shows the Company’s Chinese factory “shows almost no activity,” that the Company “has disappeared from Chinese procurement lists” and “local competitors say the company is not making discernible sales” and that the Company’s reported backlog was “dubious.”
On this news, the Company’s share price fell $0.33, or 25%, to close at $0.98 per share on November 21, 2023, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that there was a reasonable likelihood that Microvast would not be awarded the Grant after due diligence was performed; (2) that negotiations had ceased and the Grant rescinded; (3) that the Company misrepresented the nature and profitability of its businesses and partnerships; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you are a long-term stockholder of Microvast, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
