Shareholder rights law firm Robbins LLP announces that a class action has been filed on behalf of all persons and entities that purchased or acquired Zymergen Inc. (NASDAQ: ZY) stock in connection with the Company's April 2021 initial public offering ("IPO"). The complaint alleges violations of the Securities Exchange Act of 1933. Zymergen creates products that purportedly combine the design and manufacturing efficiency of biological processes with technology's ability to rapidly iterate and control diverse functions. The Company's first product is Hyaline, an optical film designed for electronic companies to use for display touch sensors.
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Zymergen Inc. (ZY) Made Misstatements Regarding its Business Prospects
According to the complaint, Zymergen held its IPO on April 23, 2021, raising approximately $530.1 million. On August 3, 2021, Zymergen issued a business update stating that it "recently became aware of issues with its commercial product pipeline that will impact the Company's delivery timeline and revenue projections." Specifically, "several key target customers encountered technical issues in implementing Hyaline into their manufacturing processes" and the market for Hyaline appears to be smaller than previously expected. As such, Zymergen "no longer expects product revenue in 2021, and expects product revenue to be immaterial in 2022." The Company also announced its CEO was stepping down. On this news, Zymergen's stock price fell $26.58, or 76%, to close at $8.25 per share on August 4, 2021.
The complaint contends that the Registration Statement was misleading in that it omitted to state that: (1) during the qualification process for Hyaline, key customers had encountered technical issues, including product shrinkage and incompatibility with customers' processes; (2) Zymergen lacked visibility into the qualification process; (3) as a result, the Company overestimated demand for its products; (4) consequently, the Company's product delivery timeline was reasonably likely to be delayed, which in turn would delay revenue generation; and (5) therefore, defendants' positive statements about the Company's business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
If you purchased shares of Zymergen Inc. stock pursuant to the Company's April 2021 IPO, you have until October 4, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
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Zymergen Inc. $ZY Made Misstatements Regarding its Business Prospects