Robbins Geller Rudman & Dowd LLP announces an investigation into potential violations of U.S. federal securities laws by Mercury Systems, Inc. (NASDAQ: MRCY) focused on whether Mercury Systems and certain of its top executive officers made false and misleading statements and/or failed to disclose material information to investors.
If you have information that could assist in this investigation or if you are a Mercury Systems investor who suffered a loss and would like to learn more, you can provide your information here:
THE COMPANY: Mercury Systems manufactures and sells components, products, modules, and subsystems for aerospace and defense industries.
THE REVELATIONS: On July 26, 2022, Glasshouse Research published a report entitled “Roll-Up Mercury Systems Set to Unravel,” explaining that its “analysis on MRCY will reveal how management has used accounting gimmicks to obfuscate true economic earnings while concealing the decay of its core company.” Specifically, Glasshouse Research concluded that Mercury Systems’ “[m]anagement has prematurely recognized revenue on significant projects boosting both revenue and earnings unsustainably”; that “[r]ecent acquisitions have been used to obfuscate true economic earnings with material non-GAAP exclusions employed over the TTM”; and that “the already dire stated TTM free-cash-flow of –$2.7 million is also grossly overstated as the company has been stiffing its vendors to conserve cash.” On this news, the price of Mercury Systems shares declined nearly 8%.
Then, on August 2, 2022, Mercury Systems reported $289.7 million in fourth quarter of 2022 revenue, below the $301.5 million to $321.5 million previously guided by the company. Mercury Systems also reported non-GAAP EPS of $0.81, missing consensus estimates by $0.17. On this news, the price of Mercury Systems shares declined by an additional 13.3%.
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