GPGI faces class action lawsuit after 42% stock decline on Husky deal

A class action lawsuit against GPGI alleges the company overstated Husky Technologies' value by millions, leading to a 42% stock decline over two trading sessions.

"GPGI had materially overstated the value of Husky to gain shareholder approval for the acquisition," Jonathan Naji, an attorney at Kessler Topaz Meltzer & Check, said. The lawsuit also claims a primary motivation of the Husky acquisition was to generate millions of dollars in fees for Resolute Holdings rather than create long-term value for CompoSecure shareholders.

GPGI, formerly known as CompoSecure, completed its acquisition of Husky Technologies, a plastic injection molding equipment manufacturer, in January 2026. On March 12, GPGI reported fourth-quarter and full-year 2025 results showing Husky's Pro Forma Adjusted EBITDA fell 5.4 percent year-over-year to $136.1 million in the fourth quarter and 3 percent to $373.4 million for the full year. The stock dropped 16.4 percent over two trading sessions, from $19.74 to $16.51.

On May 7, GPGI reported first-quarter 2026 results showing Husky's net sales declined 5.2 percent year-over-year and its Pro Forma Adjusted EBITDA plunged 40.2 percent to $38 million. The company slashed its 2026 guidance, lowering Pro Forma Adjusted Net Sales to a range of $1.95 billion to $2.10 billion from an initial $2.183 billion to $2.228 billion, and cutting Pro Forma Adjusted EBITDA guidance to $550 million to $610 million from $620 million to $650 million. The stock fell another 25.9 percent, from $17.46 to $12.94.

The lawsuit, filed in the US District Court for the Southern District of New York, covers investors who purchased GPGI Class A common stock between Nov. 3, 2025 and May 6, 2026. The deadline to seek lead plaintiff status is Sept. 14, 2026. Multiple law firms including Robbins Geller Rudman & Dowd, Bronstein Gewirtz & Grossman, and Holzer & Holzer have announced investigations or filed related actions.

The allegations follow a Feb. 26 report from Jehosaphat Research that claimed GPGI had overstated Husky's value and that free cash flow was overstated by 90 percent. The 42 percent cumulative decline erased more than $1 billion in market value from GPGI, which now trades near $13 per share. Investors must decide by mid-September whether to seek lead plaintiff status or remain absent class members in the litigation.

This article is for informational purposes only and does not constitute investment advice.