(New York) - Babcock & Wilcox Enterprises, Inc. (NYSE: BW) saw its stock fall 11.59 percent after a critical short-seller report led to at least four law firms filing a class-action lawsuit alleging the company made misleading statements to investors.
The lawsuit, filed on behalf of investors who purchased B&W securities between November 5, 2025, and March 11, 2026, alleges the company failed to disclose conflicts of interest related to a major power generation contract. According to the complaint, "B&W's largest shareholder, BRC Group Holdings, Inc. ('BRC'), stood on both sides of the Power Generation Contract and had close ties to B&W's counterparty."
On March 12, 2026, the company’s stock price fell $1.71 per share to close at $13.05 following the publication of a report by Wolfpack Research. The class period for the lawsuit extends from November 5, 2025, to March 11, 2026, and the deadline for investors to file to be a lead plaintiff is June 15, 2026. Law firms including Bronstein, Gewirtz & Grossman, LLC, Pomerantz LLP, Rosen Law Firm, and Robbins LLP have all announced investigations or filed suits.
The allegations center on a purported $2.4 billion contract for B&W to supply products and services to an artificial intelligence factory owned by Applied Digital Corporation. The Wolfpack Research report claimed that B&W's counterparty, Base Electron, shared directors and a registered address with B&W's largest shareholder, BRC Group, a fact not disclosed to investors.
The report from short-seller Wolfpack Research was the direct catalyst for the stock's sharp decline. It alleged that Applied Digital did not actually need the services B&W was contracted to provide, and suggested the "ultimate purpose of this deal may be to provide exit liquidity for [BRC]."
These revelations called into question whether B&W would ever recognize revenue from the massive contract, which it had repeatedly touted to investors. The company had used the announcement of the deal to raise an additional $67.5 million through an at-the-market (ATM) stock offering, connecting the capital raise directly to the Power Generation project. The stock had risen over 189% in the months following the initial deal announcement.
The decline to $13.05 per share marks the stock's lowest point since the deal was announced, erasing a significant portion of its recent gains. The lawsuits seek to recover damages for investors who purchased securities during the class period, alleging the company's public statements were materially false and misleading. The company's next catalyst will be its response to the litigation and any subsequent findings from the legal proceedings.
This article is for informational purposes only and does not constitute investment advice.
