Case Summary

Microvast Holdings

NASDAQ: MVST

Case Details

  • Schelling v. Microvast Holdings, Inc. et al.
  • Class Period:October 19, 2022 - November 20, 2023
  • Date Filed:December 05, 2023
  • Jurisdiction:U.S. District Court, Southern District of Texas
  • Docket Number: 4:23-cv-04565
  • Lead Plaintiff Deadline: February 5, 2024
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Overview

A class action lawsuit has been filed against Microvast Holdings, Inc., (“Microvast”, “MVST”, “MVSTW, or the “Company”) and certain of the Company’s top executive officers alleging that they violated the federal securities laws. Microvast’s common stock (shares) trade on the NASDAQ stock market under the symbol “MVST”. Microvast’s redeemable warrants trade on the NASDAQ exchange under the symbol “MVSTW”. The lawsuit seeks to represent all persons and entities who purchased or otherwise acquired publicly traded Microvast Holdings securities between October 19, 2022, and November 20, 2023, inclusive (the “Class Period”).

Microvast Holdings is a lithium-ion battery technology company which designs, develops, and manufactures battery components and systems, primarily for electric commercial vehicles and utility-scale energy storage systems.

As alleged in the lawsuit, in October 2022, the United States Department of Energy (“DOE”) conditionally selected Microvast for a proposed $200 million grant to help fund a proposed polyaramid separator production facility (“the Grant”). Polyaramid is a high-temperature resistant synthetic polymer, and a polyaramid separator is an insulating film used in high-capacity lithium-ion batteries.

On May 22, 2023, after the market closed, Reuters reported the DOE would not award Microvast the Grant. In a call with congressional staff that evening, the DOE confirmed negotiations with Microvast concerning the Grant had been cancelled. A spokesperson for the DOE stated “[t]he department can confirm that it has elected to cancel negotiations and not to award Microvast funds from this competitive funding opportunity.” The DOE stated it would not comment publicly on why it decided to cancel negotiations with any applicant but did state “the Department of Energy maintains a rigorous review process prior to the release of any awarded funds, and it is not uncommon for entities selected to participate in award negotiations under a DOE competitive funding opportunity to not ultimately receive an award[.]” This news came after months of political fervor over the Company’s alleged ties to China. On this news, the Company’s share price fell $0.80, or 36%, to close at $1.40 per share on May 23, 2023, on unusually heavy trading volume.

Then, on November 21, 2023, at approximately 9:00 a.m., J Capital Research published a report on Microvast entitled “MVST: Empty Facilities and a Grant Loss That Was Probably Hidden: Another China Hustle” (the “Report”). The Report alleged the Company knew the Grant had been rescinded for months prior to Reuters reporting but failed to inform investors. The Report alleged further that “the majority of MVST’s sales may be fake, that “Chinese customers account for 57% of revenue in 2023” but drone footage shows the Company’s Chinese factory “shows almost no activity,” that the Company “has disappeared from Chinese procurement lists” and “local competitors say the company is not making discernible sales” and that the Company’s reported backlog was “dubious.” On this news, the Company’s share price fell $0.33, or 25%, to close at $0.98 per share on November 21, 2023, on unusually heavy trading volume.

The lawsuit filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that there was a reasonable likelihood that Microvast would not be awarded the Grant after due diligence was performed; (2) that negotiations had ceased and the Grant rescinded; (3) that the Company misrepresented the nature and profitability of its businesses and partnerships; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

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If you purchased or otherwise acquired publicly traded Microvast Holdings securities between October 19, 2022, and November 20, 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 investors@dicellolevitt.com. 

The deadline to apply to the Court to serve as a lead plaintiff in the Microvast Holdings lawsuit is February 05, 2024.

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