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SAN FRANCISCO, May 06, 2021 (GLOBE NEWSWIRE) -- Hagens Berman urges XL Fleet Corp. (NYSE: XL) investors with significant losses to submit your losses now. A securities fraud class action has been filed and certain investors may have valuable claims.
XL Fleet Corp. (NYSE: XL) Securities Fraud Class Action:
The complaint alleges that: (1) XL’s sales pipelines was materially inflated; (2) XL grossly overstated its customer base; (3) XL’s technology had been materially overstated and did not provide customers the represented cost savings; and (4) that XL lacks the supply chain and engineers to roll out new products on the announced timelines.
The truth emerged on Mar. 3, 2021, when analyst Muddy Waters published a report calling XL “More SPAC Trash.” Based on interviews with former employees, Muddy Waters claimed that salespeople “were pressured to inflate their sales pipelines materially,” and that “customer reorder rates are in reality quite low” due to “poor performance and regulatory issues.” The report also alleged that “at least 18 of 33 customers XL featured were inactive.” Muddy Waters also claimed that XL has “weak technology” and that “XL’s announcement of future class 7-8 upfits seems highly promotional” because the task is “too technologically complex for XL engineers to deliver on the promised timeline.”
Then, on Mar. 4, 2021, after XL issued a denial, Muddy Waters criticized XL’s “placeholder response,” tweeting, “We spoke to a fleet manager for one of the companies XL brags about in its response. He said MPG gains only ~10%, not 25%. He said didn’t help for highway driving. Also his company bought at a deep discount. Tell. The. Truth.”
In response, the Company’s share price declined $5.55, or 33% over three trading days.
Then, on Mar. 10, 2021, after XL issued a more detailed response, Muddy Waters released another report, observing that XL did not deny key allegations, including (1) its inflated pipeline, (2) overstated customer base, and (3) low customer reorder rates.
Finally, on Mar. 31, 2021, XL announced its Q4 and FY 2020 financial results missing Q4 consensus revenue expectations by nearly 10%. Moreover, XL forecasted Q1 2021 revenues of just $1 million, or just over 90% lower than Q4 2020 and just 1% of the $75 million total FY 2021 the company previously forecasted on Nov. 12, 2020, blaming the dim outlook on chip shortages. Muddy Waters tweeted that during the earnings call, “Cannacord analyst asked about 90% sales drop QoQ in Q1, saying that doesn’t square with chip shortage-related issues he’s seen elsewhere.”
In response, the price of XL shares sharply dropped in after-hours trading.
“We’re focused on investors’ losses and proving XL misled investors by exaggerating its order backlog,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you are an XL investor and have significant losses, or have knowledge that may assist the firm’s investigation, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding XL Fleet should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email XL@hbsslaw.com.
About Hagens Berman
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Reed Kathrein, 844-916-0895