Law Offices of Howard G. Smith reminds investors of the upcoming July 13, 2021 deadline to file a lead plaintiff motion in the case filed on behalf of investors who purchased Danimer Scientific Inc. securities between October 5, 2020 and May 4, 2021, inclusive (the “Class Period”).
Investors suffering losses on their Danimer investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to firstname.lastname@example.org.
On Saturday, March 20, 2021, The Wall Street Journal published an article entitled “Plastic Straws That Quickly Biodegrade in the Ocean? Not Quite, Scientists Say” addressing, among other things, Danimer’s claims that Nodax, a plant-based plastic that Danimer markets, breaks down far more quickly than fossil-fuel plastics. The article alleges that according to several experts on biodegradable plastics, “many claims about Nodax are exaggerated and misleading.” According to the article, Jason Locklin, the expert who co-authored the study touted by Danimer as validating its material, stated that Danimer’s marketing is “sensationalized” and that making broad claims about Nodax’s biodegradability “is not accurate” and is “greenwashing.”
On this news, the Company’s stock price fell $6.43 per share, or roughly 13%, to close at $43.55 per share on March 22, 2021.
On April 22, 2021, Spruce Point Capital Management (“Spruce Point”) published a research report entitled “When the Tide Goes Out, What Will Wash Ashore?” In addition to the concerns about Danimer’s product biodegradability claims, the report found “multiple conflicting sources of Danimer’s facility sizes and production capacity” and “inconsistencies between reported figures and city filings for Kentucky facility capital costs.” The report also raised doubts about the strength of the Company’s purported partnerships with Pepsi and Nestlé because Pepsi recently sold its equity stake in Danimer and “both the top Pepsi and Nestlé executives with close relationships to Danimer recently resigned.”
On this news, the Company’s stock price fell $2.01, or 8%, to close at $22.99 per share on April 22, 2021, on unusually heavy trading volume.
On May 4, 2021, Spruce Point published a follow-up report. Citing information obtained via a Freedom of Information Act (“FOIA”) request from the Kentucky Department of Environmental Protection, the report alleged that “Danimer’s production figures, its pricing, and rosy financial projections are wildly overstated” and that its Kentucky facility received a notice of compliance violations from the Division for Air Quality. Moreover, “Danimer’s PHA average selling price appears to be 30% – 42% below management’s claims.”
On this news, the Company’s stock price fell $4.48, or 20%, over three consecutive trading sessions to close at $17.66 per share on May 6, 2021, on unusually heavy trading volume.
The complaint filed 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 biodegradable materials such as Nodax could take years to break down; (2) that, as a result, the Company’s marketing claims that Nodax products could biodegrade within months were exaggerated and misleading; (3) that monthly biopolymer production and natural gas usage at the Company’s Kentucky and Georgia facilities were materially overstated; (4) that Danimer faced compliance violations for its Kentucky facility from the Division of Air Quality; and (5) 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. The first-filed case is pending in the United States District Court for the Eastern District of New York, captioned Rosencrants v. Danimer Scientific, Inc., et al., Case No. 1:21-cv-02708.
If you purchased or otherwise acquired Danimer securities during the Class Period, you may move the Court no later than July 13, 2021 to ask the Court to appoint you as lead plaintiff if you meet certain legal requirements. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to email@example.com, or visit our website at www.howardsmithlaw.com.
Law Offices of Howard G. Smith
Howard G. Smith, Esquire