NEW YORK, July 21, 2021 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Virgin Galactic Holdings, Inc. (NYSE:SPCE), RLX Technology, Inc. (NYSE:RLX), and Stable Road Acquisition Corp. (NASDAQ:SRAC). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Virgin Galactic Holdings, Inc. (NYSE:SPCE)
Class Period: October 26, 2019 to April 30, 2021
Lead Plaintiff Deadline: July 27, 2021
On October 25, 2019, post-market, Virgin Galactic was formed via a business combination between Social Capital Hedosophia Holdings Corp. (“SCH”), a special purpose acquisition company (“SPAC”), and the Company’s then-private predecessor (“Legacy Virgin Galactic”), after which SCH changed its name to “Virgin Galactic Holdings, Inc.” and its ticker symbol to “SPCE” (the “Business Combination”).
On April 12, 2021, the SEC issued guidance advising that SPAC warrants, which are instruments that allow investors to buy additional shares at a fixed price, may need to be classified as liabilities rather than equity for many SPAC transactions, which had previously been accounted for as equity in these deals.
Throughout the Class Period, defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) for accounting purposes, SCH’s warrants were required to be treated as liabilities rather than equities; (ii) Virgin Galactic had deficient disclosure controls and procedures and internal control over financial reporting; (iii) as a result, the Company improperly accounted for SCH warrants that were outstanding at the time of the Business Combination; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On April 30, 3021, post-market, Virgin Galactic announced “that it has rescheduled the reporting of its financial results for the first quarter 2021 to following the close of the U.S. markets on Monday, May 10, 2021. Virgin Galactic will now host a conference call to discuss the results and provide a business update that day at 2:00 p.m., Pacific Time (5:00 p.m., Eastern Time). The Company is rescheduling its reporting due to the recent statement issued by the [SEC] on April 12, 2021 relating to the accounting treatment of warrants issued by special purpose acquisition companies (the ‘SEC Statement’).” The press release further advised that “following its review of the SEC Statement and consulting with its advisors, the Company will restate its consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The restatement is due solely to the accounting treatment for the warrants of Social Capital Hedosophia Holdings Corp. that were outstanding at the time of the Company’s business combination on October 25, 2019. The Company expects to file the restated financials prior to the new conference call date and estimates that it will recognize incremental non-operating, non-cash expense for each of the fiscal years ended December 31, 2020 and December 31, 2019.”
On this news, Virgin Galactic’s stock price fell $2.01 per share, or 9.07%, to close at $20.14 per share on May 3, 2021.
For more information on the Virgin Galactic class action go to: https://bespc.com/cases/SPCE
RLX Technology, Inc. (NYSE:RLX)
Class Period: Pursuant and/or traceable to the January 22, 2021 IPO
Lead Plaintiff Deadline: August 9, 2021
RLX Technology purports to be the “No. 1 branded e-vapor company in China,” which it also claims is its “largest potential market.” In January 2021, as part of RLX Technology’s IPO, defendants issued approximately 116.5 million ADS to the investing public at $12 per ADS, raising approximately $1.4 billion in gross proceeds.
On or about March 22, 2021, China’s Ministry of Industry and Information Technology posted draft regulations confirming that e-cigarettes and new tobacco products would be regulated similar to traditional tobacco offerings. On this news, RLX Technology’s ADS price declined nearly 48%.
Then, on June 2, 2021, RLX Technology published its first quarter 2021 financial results, revealing a mere 48% increase in net revenues quarter over quarter, and second quarter guidance suggesting that its gross margin would only “remain steady.” On this news, RLX Technology’s ADS price fell an additional 9%. By the commencement of this action, RLX Technology’s ADSs traded more than 32% below the IPO offering price.
The RLX Technology class action lawsuit alleges that the Registration Statement contained untrue statements of material fact and omitted to state material facts both required by governing regulations and necessary to make the statements made not misleading. Among other things, the RLX Technology class action lawsuit alleges that the Registration Statement misrepresented and omitted that RLX Technology knew (or had information making it foreseeable to know), at the time of the IPO, that China was working on a national standard for e-cigarettes that would bring them into line with regular cigarette regulations. The RLX Technology class action lawsuit further alleges that RLX Technology knew that its reported financials were not nearly as rosy as the Registration Statement made it seem, nor indicative of future results. By omitting these facts and, for example, representing that the risk of regulation was only a contingent possibility, the RLX Technology class action lawsuit alleges that investors were unable to adequately assess the value of the shares offered in connection with the IPO, and thus purchased their ADSs without material information and to their detriment.
For more information on the RLX class action go to: https://bespc.com/cases/RLX
Stable Road Acquisition Corp. (NASDAQ:SRAC)
Class Period: October 7, 2020 to July 13, 2021
Lead Plaintiff Deadline: September 13, 2021
On October 7, 2020, Stable Road and Momentus – a private commercial space company – issued a joint press release announcing that Stable Road had agreed to acquire Momentus in a proposed merger, subject to shareholder approval. The press release stated that the merger would “create the first publicly traded space infrastructure company at the forefront of the new space economy.”
On January 25, 2021, Momentus announced that defendant Kokorich had resigned as Momentus’s CEO “in an effort to expedite the resolution of U.S. government national security and foreign ownership concerns surrounding the Company.” On this news, the price of Stable Road Class A stock fell 19% over three trading days, to close at $20.10 per share on January 27, 2021.
Then, on July 13, 2021, the U.S. Securities and Exchange Commission (“SEC”) announced charges against Stable Road, its CEO, defendant Brian Kabot, SRC-NI Holdings, Momentus, and defendant Kokorich for making “misleading claims about Momentus’s technology and about national security risks associated with Kokorich.” The release, among other things, stated that all parties other than defendant Kokorich had settled the charges against them for $8 million in total, while the case against defendant Kokorich continued. Also on July 13, 2021, the SEC publicized a cease-and-desist order and complaint against defendant Kokorich which detailed defendants’ scheme to defraud investors in connection with the merger.
On this news, on July 14, 2021, the price of Stable Road Class A stock fell $1.22 per share, or 10%, to close at $10.66 per share.
The Stable Road class action lawsuit alleges that, throughout the Class Period, defendants misrepresented and failed to disclose adverse facts about Momentus’s business, operations, and prospects and Stable Road’s due diligence activities in connection with the merger, which were known to defendants or recklessly disregarded by them, as follows: (a) Momentus’s 2019 test of its key technology, a water plasma thruster, had failed to meet Momentus’s own public and internal pre-launch criteria for success, and was conducted on a prototype that was not designed to generate commercially significant amounts of thrust; (b) the U.S. government had conveyed that it considered Momentus’s CEO, defendant Mikhail Kokorich, a national security threat, which jeopardized Kokorich’s continued leadership of Momentus and Momentus’s launch schedule and business prospects; (c) consequently, the revenue projections and business and operational plans provided to investors regarding Momentus and the commercial viability and timeline of its products were materially false and misleading and lacked a reasonable basis in fact; and (d) Stable Road had failed to conduct appropriate due diligence of Momentus and its business operations and defendants had materially misrepresented the due diligence activities being conducted by Stable Road executives and its sponsor in connection with the merger.
For more information on the Stable Road class action go to: https://bespc.com/cases/SRAC
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.