PSIX Stock Collapses 29% on Margin Contraction
Shares of Power Solutions International (NASDAQ: PSIX) plummeted 28.97% on March 3, 2026, erasing $24.84 per share to close at $60.91. The sharp decline was a direct reaction to the company's fourth-quarter and full-year 2025 financial results, announced the prior day. In the release, Power Solutions disclosed that its gross margin had contracted by 8% year-over-year. Management attributed the poor performance to "operating inefficiencies related to [the Company’s] accelerated production ramp-up for data center product lines."
The forward-looking guidance provided little relief for investors, with the company forecasting only "moderate margin improvement" for 2026 from its data center products. The disclosure that Power Solutions was only now "beginning to see measurable improvements" from actions to fix its supply chain and manufacturing costs signaled that operational headwinds would likely persist, triggering the massive investor sell-off.
Lawsuit Alleges Misleading Statements on Data Center Growth
Following the stock's collapse, multiple law firms have filed a shareholder class-action lawsuit against Power Solutions. The lawsuit covers investors who purchased shares between May 8, 2025, and March 2, 2026. The complaint alleges that during this period, the company made materially false and misleading statements regarding its business prospects. Specifically, the suit claims Power Solutions overstated its ability to meet sales demand in the lucrative data center market while simultaneously understating the severe impact and costs associated with its manufacturing enhancements.
According to the legal filings, the company's positive statements about its operations lacked a reasonable basis, failing to disclose the significant "inefficiencies" that ultimately eroded its gross margin. Investors who wish to serve as lead plaintiff in the case must file with the court by May 19, 2026. The legal action seeks to recover damages for shareholders who suffered significant losses based on the company's alleged misrepresentations.
