NEW YORK, Dec. 08, 2022 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of Generac Holdings, Inc. (“Generac” or the “Company”) (NYSE: GNRC). Such investors are advised to contact Robert S. Willoughby at newaction@pomlaw.com or 888-476-6529, ext. 7980.
The investigation concerns whether Generac and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
[Click here for information about joining the class action]
On August 1, 2022, Generac’s channel partner Pink Energy filed a lawsuit against Generac, revealing that Generac’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 Generac’s stock price to fall $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 totalling 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, that would not be paid. These disclosures caused the Generac’s stock price to decline by $37.44 per share, or 25%.
Then, 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 Chief Executive Officer Aaron 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. As a result of these disclosures, Generac’s stock price declined by $8.99 per share, or 8%.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980
