Key Takeaways:
Shares of Tennant Company (NYSE: TNC) fell 23.4% on February 24 after the company disclosed significant operational failures and a $30 million sales loss, prompting a shareholder investigation by law firm Bleichmar Fonti & Auld LLP.
BFA is investigating whether Tennant made "false and misleading statements to investors regarding the implementation and rollout of a large-scale ERP system," according to the firm's announcement on May 25.
The industrial cleaning equipment manufacturer revealed its new ERP system in North America led to severe disruptions, preventing the processing and shipping of customer orders. This resulted in an estimated $30 million in lost sales and will require over $20 million in remediation costs in 2026, four times the original budget of approximately $5 million.
The news caused Tennant's stock price to collapse by $19.28 in a single day, falling from a closing price of $82.30 on February 23 to $63.02 on February 24, wiping out significant shareholder value and triggering the legal scrutiny.
The investigation focuses on Tennant's prior assurances to investors. The company had previously described the ERP project as "progressing as we've anticipated" and "on time and on budget." Furthermore, Tennant had characterized the initial launch in its Asia-Pacific region as "successful," claiming it had "mitigated disruptions and stabilized operations."
Bleichmar Fonti & Auld, a law firm specializing in securities class actions, is encouraging investors who purchased Tennant stock to contact them. The firm has a history of securing large settlements, including a notable recovery of over $900 million in value from Tesla, Inc.'s Board of Directors.
The investigation could lead to a class-action lawsuit, exposing Tennant to significant legal costs and potential financial damages. For investors, the key concern is the erosion of trust in management's disclosures, and the stock's recovery will likely depend on the company's ability to resolve the ERP issues and the outcome of the legal proceedings.
This article is for informational purposes only and does not constitute investment advice.
