- City of Fort Lauderdale General Employees' Retirement System v. Holley Inc., et al.
- Class Period:July 21, 2021 - February 06, 2023
- Date Filed:November 06, 2023
- Jurisdiction:U.S. District Court, Western District of Kentucky
- Docket Number: 1:23-cv-00148
- Lead Plaintiff Deadline: January 5, 2024
Seek Plaintiff 32
A class action lawsuit captioned City of Fort Lauderdale General Employees’ Retirement System v. Holley Inc., et al. has been filed against Holley, Inc (“Holley” or the “Company”) f/k/a Empower Ltd. (“Empower”) (NYSE: HLLY) and certain of the Company’s top executive officers alleging that they violated the federal securities laws. The lawsuit seeks to represent all persons and entities who purchased or otherwise acquired Holley securities between July 21, 2021, and February 6, 2023, inclusive (the “Class Period”).
Empower previously operated as a blank check company, also referred to as a special purpose acquisition company (“SPAC”). A SPAC is a development stage company formed for the purpose of entering a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization, or other similar business transaction with one or more operating businesses or entities. Empower raised $250 million in its initial public offering of common stock and warrants in October 2020, and was listed on the New York Stock Exchange (“NYSE”) under the ticker symbols “EMPW,” “EMPW-UN,” and “EMPW-WT.”
On July 16, 2021, Empower completed a business combination with Holley Intermediate Holdings, Inc., a privately held company (the “Business Combination”). As a result of the Business Combination, among other things, the combined company became named “Holley Inc.” and beginning on July 19, 2021, its common stock and warrants traded on the NYSE under the new ticker symbols “HLLY” and “HLLY WS,” respectively.
Holley designs, manufactures, and distributes performance automotive products to customers primarily in the United States, Canada, and Europe. The Company’s line of automotive products includes numerous items such as carburetors, fuel injection systems, exhaust products, transmission products, and automotive software products. The Company’s products are designed to enhance street, off-road, recreational, and competitive vehicle performance through increased horsepower, torque, and drivability. Holley conducts operations through its various wholly owned subsidiaries, including Holley Performance Products Inc., Hot Rod Brands, Inc., Simpson Safety Solutions, Inc., B&M Racing and Performance Products, Inc., and Speedshop.com, Inc.
The Holley class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) as a result of Holley’s extensive focus on its direct-to-consumer (“DTC”) channel, Holley’s critically important relationships with its resellers and distributors, whose business made up the vast majority of Holley’s revenue, were suffering significant damage; (ii) Holley used discounting and other similar efforts to grow its DTC channel, which undermined the pricing discipline Holley historically had with its resellers and distributors, and further damaged Holley’s relationship with its resellers and distributors; (iii) as a result of Holley’s strained relationships with its resellers and distributors, those resellers and distributors were decreasing their purchases of Holley products, returning products already purchased at significant levels that were far above historical norms, and increasing their purchases of competitors’ products; (iv) Holley’s growing DTC channel could not offset the negative financial impact of Holley’s increasingly strained relationships with its resellers and distributors and, as a result, Holley’s critical relationship with resellers and distributors was deteriorating; (v) Holley had failed to successfully integrate and capture synergies from its numerous acquisitions, which left Holley with inefficient operations, excess costs, and inventory management problems; and (vi) Holly benefited from COVID-related stimulus money that temporarily boosted its sales and performance, and despite this unsustainable, temporary boost, defendants misled investors to believe the growth was sustainable and the result of persistent demand, and supportive of positive financial guidance.
On July 28, 2022, Holley announced preliminary financial results that missed expectations and slashed its full year 2022 outlook. On this news, the price of Holley stock fell more than 47% over two trading sessions. Then, on November 14, 2022, Holley further announced disappointing financial results for third quarter 2022. On this news, the price of Holley stock fell nearly 7%.
Thereafter, on February 6, 2023, Holley announced that Chief Executive Officer and President Tom Tomlinson was retiring, effective immediately, and also resigning from Holley’s Board of Directors. Also on February 6, 2023, Holley announced its preliminary fourth quarter 2022 and full year 2022 financial results, revealing that fourth quarter 2022 sales fell short of market estimates as well as adjusted EBITDA that new Holley Chief Financial Officer Jesse Weaver called “disappointing.” On this news, the price of Holley stock fell more than 37% over two trading sessions.
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If you purchased or otherwise acquired Holley securities between July 21, 2021, and February 6, 2023, inclusive, and suffered substantial losses, and you wish to serve as lead plaintiff in this lawsuit, we encourage you to submit your information to DiCello Levitt LLP via the form on this page.
You can also contact DiCello Levitt partner Brian O’Mara by calling (888) 287-9005 or at firstname.lastname@example.org.
The deadline to apply to the Court to serve as a lead plaintiff in the Holley lawsuit is January 05, 2024.