A securities lawsuit has been filed against US residential solar installer Sunrun Inc (NASDAQ:RUN) with accusations that its board failed to disclose material adverse facts about the company's activities and prospects ahead of its listing in August 2015.
Over the past few days, a number of law firms including Bronstein, Gewirtz & Grossman LLC, said that a class action lawsuit has been filed against Sunrun on behalf of a class consisting of all persons or entities who purchased its stock pursuant to the registration statement and prospectus issued in connection with the firm’s initial public offering (IPO).
The class action seeks to recover damages for alleged violations of the federal securities laws under the Securities Exchange Act of 1934. It claims that the company understated its operating costs, had been overcharging electricity rates, omitted to mention the regulatory problems it faced in Nevada along with the fact that it had a substantial 20% customer concentration there, and exaggerated the value of its retained assets, according to a Friday statement by Bronstein, Gewirtz & Grossman.
Subsequently, when it became clear that Sunrun could not meet the revenue forecast it made before the IPO, its stock dropped as low as USD 4.86 (EUR 4.30) per share and closed at USD 7.50 apiece on May 6. It sold shares at USD 14.00 apiece as part of the IPO and thus raised over USD 250 million.
The class action lawsuit has been filed in the US District Court for the Northern District of California.
On Thursday, the company reported a net profit attributable to common stockholders of USD 13.1 million for the first quarter of 2016, versus losses of USD 18 million a year earlier and of USD 15 million in the preceding quarter.
(USD 1.0 = EUR 0.886)
Choose your newsletter by Renewables Now. Join for free!