SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that purchasers or acquirers of Stem, Inc. (“Stem”) f/k/a Star Peak Energy Transition Corp. (NYSE: STEM; STEM.WS) securities: (a) pursuant and/or traceable to the offering documents issued in connection with the merger consummated on April 28, 2021 by and among Stem, Star Peak Energy Transition Corp. Merger Sub Corp., and Stem, Inc., a private Delaware corporation (“Legacy Stem”); and/or (b) between March 4, 2021 and February 16, 2023, inclusive (the “Class Period”) have until July 11, 2023 to seek appointment as lead plaintiff of the Stem class action lawsuit. Captioned Petersen v. Stem, Inc. f/k/a Star Peak Energy Transition Corp., No. 23-cv-02329 (N.D. Cal.), the Stem class action lawsuit charges Stem and certain of Stem’s top current and former executives and directors with violations of the Securities Act of 1933 and/or Securities Exchange Act of 1934.
If you suffered substantial losses and wish to serve as lead plaintiff of the Stem class action lawsuit, please provide your information here:
CASE ALLEGATIONS: On December 4, 2020, Stem announced that it had entered into a definitive agreement to merge with Star Peak Energy Transition Corp., a special purpose acquisition corporation (known as a SPAC or blank-check company), and Legacy Stem, a purported global leader in AI-driven clean energy storage systems, that would result in a combined company with an estimated equity value of approximately $1.35 billion. On February 24, 2022, Stem issued a press release announcing that it had entered into a strategic partnership with Available Power (“AP”), a purported developer of distributed energy resources and microgrid systems for commercial and industrial real estate, with a “[v]alue of award expected to exceed $500 million across the project portfolio” and that “provide[d] Stem exclusive rights to 100 standalone energy storage projects in Texas.”
But as the Stem class action lawsuit alleges, the merger’s offering documents and defendants throughout the class period made false and/or misleading statements and/or failed to disclose that: (i) Legacy Stem suffered from material weaknesses in internal control over financial reporting related to accounting for deferred cost of goods sold and inventory, certain revenue recognition calculations, and internal-use capitalized software calculations; (ii) Stem had overstated Legacy Stem’s and its own post-merger business and financial prospects; (iii) Stem’s software revenue did not make up 100% of Stem’s services revenue; and (iv) Stem had overstated the benefits expected to flow from its AP partnership.
On March 15, 2021, Stem revealed that Legacy Stem suffered from various previously undisclosed material weaknesses in its internal control over financial reporting related to, inter alia, “accounting for . . . deferred cost of goods sold and inventory,” “the review of certain revenue recognition calculations,” and “the review of internal-use capitalized software calculations.” On this news, Stem’s stock price fell.
Then, on February 24, 2022, Stem reported full year 2021 earnings per share of -$0.96, missing consensus estimates by $0.05, as well as revenue of $127.37 million, missing consensus estimates by $19.58 million. On this news, Stem’s stock price fell by more than 21%.
Thereafter, on January 5, 2023, Stem released an investor presentation deck that it had prepared in connection with its attendance at the Goldman Sachs Global Energy and Clean Technology Conference, wherein Stem revealed that its 2022 bookings backlog was “partially offset by [a] Stem-initiated contract cancellation (~$130M) due to partner nonperformance on [an] agreed timeline.” On this news, Stem’s stock price fell by nearly 9%.
Finally, on February 16, 2023, Stem reported fourth quarter 2022 revenue of $156 million, versus consensus estimates of $166 million, and issued disappointing full year 2023 revenue guidance of $550 million to $650 million, which was mostly below consensus estimates of $647 million. On this news, Stem’s stock price fell by nearly 14.8%, further damaging investors.
Robbins Geller has launched a dedicated SPAC Task Force to protect investors in blank check companies and seek redress for corporate malfeasance. Comprised of experienced litigators, investigators, and forensic accountants, the SPAC Task Force is dedicated to rooting out and prosecuting fraud on behalf of injured SPAC investors. The rise in blank check financing poses unique risks to investors. Robbins Geller’s SPAC Task Force represents the vanguard of ensuring integrity, honesty, and justice in this rapidly developing investment arena.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased or acquired Stem securities pursuant and/or traceable to the offering documents issued in connection with the merger and/or during the Class Period to seek appointment as lead plaintiff of the Stem class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Stem class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Stem class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the Stem class action lawsuit.
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