Key Takeaways:
Microvast Holdings Inc. faces a shareholder class action alleging it misled investors about margin targets and a factory expansion, causing a 34% stock decline.
"Microvast failed to disclose inventory management issues and customer rollout delays that made its margin targets unachievable," the complaint filed by Robbins LLP alleges.
The lawsuit covers investors who bought MVST shares between April 1, 2025, and March 16, 2026. On that final date, Microvast reported fourth-quarter gross margin of about 1%, down from roughly 36% a year earlier, and revenue of $96.5 million — 15% below the prior year and well short of the $136.4 million consensus estimate. The company blamed inventory impairment charges from specialized energy storage system components and regulatory shifts in South Korea. Shares fell 34.2%, or 79 cents, to close at $1.52 on March 17.
The complaint also alleges Microvast overstated its ability to complete the Huzhou Phase 3.2 expansion in China by the end of 2025. Investors have until Sept. 21 to seek lead plaintiff status. The case adds legal overhang to a company already grappling with deteriorating margins and slowing demand in key markets.
Microvast designs and manufactures advanced battery technologies for electric commercial vehicles and energy storage systems. The company went public via a SPAC merger in 2021.
During the class period, management touted a strategic repositioning away from low-margin segments toward higher-value opportunities and projected improved margins from the Huzhou expansion. The lawsuit alleges those statements were materially false and misleading.
Holzer & Holzer LLC separately filed a similar class action on behalf of Microvast shareholders, the firm said Wednesday. Both cases seek unspecified damages.
The stock has lost more than 80% of its value since its 2021 debut. Microvast did not immediately respond to a request for comment.
The lawsuit creates a new overhang for Microvast as it navigates shrinking margins and delayed customer rollouts. Investors will watch for any settlement or dismissal motions in the coming months, with the lead plaintiff deadline set for late September.
This article is for informational purposes only and does not constitute investment advice.
