Did you lose money on investments in Generac Holdings? If so, please visit Generac Holdings Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com to discuss your rights.
NEW YORK, Jan. 17, 2023 (GLOBE NEWSWIRE) -- Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the common stock of Generac Holdings Inc. (“Generac” or the “Company”) (NYSE: GNRC) between April 29, 2021 and November 1, 2022, inclusive (the “Class Period”). The lawsuit was filed in the United States District Court for the Eastern District of Wisconsin and alleges violations of the Securities Exchange Act of 1934.
Generac is a diversified energy solutions company providing an array of energy management technology as well as prime and backup power solutions. The Company manufactures, markets, and distributes a variety of products across North America and abroad.
Plaintiff alleges that Defendants made materially false and misleading statements throughout the Class Period. Specifically, Plaintiff alleges that repeated misrepresentations by Generac and its senior executives concealed from investors a defective component at the core of Generac’s solar power products. That component – the “SnapRS” – was intended to perform an essential safety function by rapidly shutting down solar devices in certain dangerous situations. Rather than protecting consumers, the SnapRS would overheat, melt and, in some cases, start fires.
Defendants knew that the versions of the SnapRS installed in thousands of homes were defective and dangerous. Numerous consumers filed complaints with regulators and Generac’s business partners that sold, installed, and serviced Generac’s solar products informed the Company of the SnapRS defect.
Instead of warning investors and consumers, Defendants continued to tout the success and reliability of Generac’s solar energy products while quietly making minor modifications to the SnapRS, including issuing a firmware update. After these modifications failed to fix the SnapRS, Defendants continued to mislead investors.
Generac relied on “channel partners” to sell, service, and install its solar battery storage systems, including Power Home Solar, LLC d/b/a Pink Energy (“Pink Energy”), Baker Electric Home Energy, Posigen, and Valley Solar. During the Class Period, Pink Energy was the largest of these partners, with operations in 15 states. Among other deceptions, Generac misled investors about its dependence on Pink Energy, falsely assuring investors that no single customer or partner drove more than 6% of its sales and that Generac had a broad and diverse network of distribution partners.
Generac also misled investors about its financial condition by failing to account for its liability for warranty claims arising from the defective SnapRS. By misrepresenting its warranty liability, Generac also overstated its earnings throughout the Class Period, and falsely assured investors that the Company’s financial statements were prepared in accordance with Generally Accepted Accounting Principles.
Investors began to learn the truth about Generac’s defective SnapRS on August 1, 2022, when Pink Energy filed a lawsuit against Generac, revealing that the Company’s “defective” SnapRS components caused millions of dollars of damage, giving rise to liability that threatened Pink Energy’s solvency (the “Pink Energy Complaint”). The disclosures in the Pink Energy Complaint caused the price of Generac shares to decline by $3.31 per share. The liability created by defective SnapRS components ultimately forced Pink Energy to declare bankruptcy on October 7, 2022.
In the wake of Pink Energy’s bankruptcy, on October 19, 2022, Generac revealed that it had taken “pre-tax charges totaling approximately $55 million, including approximately $37 million of clean energy product warranty-related matter and approximately $18 million of bad debt expense related to a clean energy product customer that has filed for bankruptcy.” The $37 million charge related to warranty expenses appears to reflect Generac’s belated acknowledgment of its increased liability to redress defective SnapRS units. The $18 million charge related to “bad debt expense” reflects receivables owed by Pink Energy, and possibly other partners or customers burdened with defective SnapRS products, which would not be paid. The October 19 disclosures caused the price of Generac shares to decline by $37.44 per share, or 25%.
Finally, on November 2, 2022, Generac released its earnings results for the third quarter of 2022, and lowered sales guidance on its solar energy business for the remainder of the year by approximately 40%. On a conference call with investors and analysts held that same day, Generac’s CEO, Defendant Jagdfeld, attributed the lowered guidance to “the loss of a major customer during the quarter, along with the specific warranty-related issue”- i.e., the defective SnapRS component and the Pink Energy bankruptcy that resulted directly from that defect. Analysts expressed shock upon learning how dependent Generac’s clean energy business was on Pink Energy, with several analysts noting that investors had not been told of the significant concentration of that business with a single partner. On this news, Generac’s stock fell $8.99 to close at $105.71 per share on November 2, 2022.
If you wish to serve as lead plaintiff, you must move the Court no later than January 30, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased or acquired Generac common stock, and/or would like to discuss your legal rights and options please visit Generac Holdings Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
ATTORNEY ADVERTISING. © 2023 Bernstein Liebhard LLP. The law firm responsible for this advertisement is Bernstein Liebhard LLP, 10 East 40th Street, New York, New York 10016, (212) 779-1414. Prior results do not guarantee or predict a similar outcome with respect to any future matter.
Contact Information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
pallocco@bernlieb.com
