Did you lose money on investments in Stem Inc.? If so, please visit Stem, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com to discuss your rights.
NEW YORK, May 16, 2023 (GLOBE NEWSWIRE) -- Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired the securities of Stem, Inc. (“Stem” or the “Company”) (NYSE: STEM) f/k/a Star Peak Energy Transition Corp. (“STPK”) between March 4, 2021 and February 16, 2023, both dates inclusive (the “Class Period”). The lawsuit was filed in the United States District Court for the Northern District of California and alleges violations of the Securities Exchange Acts of 1933 and 1934.
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), 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”) 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”.
Plaintiff alleges that Defendants’ statements made in connection with the merger and throughout the Class Period were materially false and misleading when made because the Company: (i) suffered from material weaknesses in internal controls 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) overstated business and financial prospects; (iii) failed to disclose that software revenue did not make up 100% of the Company’s services revenue; and (iv) overstated the benefits expected to flow from its AP partnership.
On January 11, 2023, Blue Orca Capital (“Blue Orca”) issued a report alleging undisclosed issues with Stem’s business and financial prospects, including, among other things, that the Company had overstated its software revenues by falsely claiming that 100% of its services revenue line was attributable to software revenues. Thereafter, on January 12, 2023, Stem issued a response, purporting to refute Blue Orca’s claims. In doing so, however, the Company never expressly refuted Blue Orca’s claims that software revenue did not make up 100% of the Company’s services revenue. Separately, Stem’s response to the Blue Orca report clarified that the Company’s “canceled . . . booking of approximately $135 million in the fourth quarter of 2022” - as first disclosed in Stem’s January 5, 2023 investor presentation deck - was “attributable solely to DevCo projects with [AP]” and that “[w]e have not recorded any revenue from any [AP] projects and there are no additional projects in the backlog with this former partner.”
Finally, on February 16, 2023, Stem reported its 4Q 2022 results and 2023 guidance. The Company reported 4Q revenue of $156 million, versus consensus estimates of $166 million, and issued disappointing FY 2023 revenue guidance of $550 million to $650 million. On this news, Stem’s stock price fell $1.44 per share, or 14.78%.
If you wish to serve as lead plaintiff, you must move the Court no later than July 11, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased or acquired Stem securities, and/or would like to discuss your legal rights and options please visit Stem, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or pallocco@bernlieb.com.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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Contact Information:
Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
pallocco@bernlieb.com
