Five Upcoming Class Actions for Investors to Know About

These five recently-filed class action suits could be of interest to investors. Read on to learn about investors’ concerns about the alleged activities of the following companies: MBLY, BNTX, DADA, INSP, ON.

Class Action Filed Against Mobileye Global Inc.

Mobileye Global (MBLY) manufactures computer chip components for autonomous driving vehicles. On January 4, 2024, the company issued a press release that sent the stock spiraling. According to Mobileye’s statement, the company had a build-up of excess inventory in its customer channels of approximately 6 million to 7 million units of its EyeQ System-on-Chip. This means that these customers will not be ordering new chips any time soon and a “temporary impact on [ ] profitability” was likely. Mobileye’s stock price plummeted by about 25% in response to the announcement.

Mobileye’s announcement said that the build-up of inventory was due to concerns over “supply chain constraints in 2021 and 2022.” This raises several questions, including whether and how long Mobileye has been aware of the inventory glut and if the company’s customers have already refrained from placing new orders. In short, Mobileye’s revenue and growth prospects have been drawn into question and may not be recovering too quickly.

On January 16, 2024, a class action complaint was filed, alleging that the company failed to disclose to investors that (1) to avoid the shortages experienced amid supply chain constraints in 2021 and 2022, the company’s Tier 1 customers had purchased inventory in excess of demand during fiscal 2023; (2) as a result, the company’s customers had excess inventory on hand, including approximately 6-7 million units of EyeQ SoCs; and (3) due to the build-up of inventory, there was a significant risk that the Tier 1 customers would buy less product, thus adversely impacting the company’s fiscal 2024 financial results.

Class Action filed Against BioNTech SE

BioNTech (BNTX) is a biotechnology company that develops and commercializes immunotherapies for cancer and other infectious diseases. In collaboration with Pfizer Inc., (PFE) the company developed a COVID-19 vaccine called Comirnaty. During the period between March 30, 2022 and October 13, 2023, as the overall number of COVID-19 cases began to decline and the Omicron subvariant began to account for most of the reported cases, BioNTech represented to the market and investors that Comirnaty remained in-demand, despite not yet having a version of Comirnaty approved for the Omicron subvariant. After a series of announcements in late 2023 disclosing inventory write-downs and other charges relating to Comirnaty, BioNTech shares closed at $96.97, down from a close of $183.11 per share on August 5, 2022.

On January 12, 2024, a class action complaint was filed, alleging that the company failed to disclose to investors that BioNTech overstated demand for Comirnaty and its commercial prospects and the company accumulated excess inventory of raw materials for Comirnaty, placing the company at an increased risk of recording significant inventory write-offs and other charges related to Comirnaty.

Class Action Filed Against Dada Nexus Limited

Dada (DADA) is a platform for local on-demand retail and delivery in China. The company operates JD-Daojia, one of China’s largest local on demand retail platforms for retailers and brand owners, and Dada Now, a leading local on-demand delivery platform open to merchants and individual senders across various industries and product categories. On January 8, 2024, Dada issued a press release in which it announced that “in the course of its routine internal audit, certain suspicious practices were identified that may cast doubt on certain revenues from the company’s online advertising and marketing services in 2023.” In response, Dada ADRs plummeted 45.87%, closing at $17.12 per share.

On January 10, 2024, a class action complaint was filed alleging that the company failed to disclose that Dada revenues from online advertising, marketing services, and operations and support costs were materially overstated, and, as a result, Dada would need to conduct an independent review to determine the scope and of the suspicious practices that led to overstated revenues and costs.

Class Action Filed Against Inspire Medical Systems, Inc.

Inspire Medical (INSP) is a medical technology company that offers the only device that has been approved by the FDA for patients with obstructive sleep apnea (“OSA”). At a conference in early 2023, the chief executive officer said that the “biggest challenge” in generating revenue for company’s OSA device was patients getting an appointment with a doctor to be evaluated and receive prior authorization. To meet that challenge and increase demand for the device, the company introduced a pilot program under which company employees coordinated with customers to directly access doctors’ electronic schedules and schedule doctor appointments online, without the need for phone calls. The company made repeated public statements as to the effectiveness of the pilot program and that it achieved a “30% improvement in physician appointments.”

When these statements were made, however, Inspire Medical was already tracking problems with the program, including a decrease in the number of prior authorization submissions for Inspire therapy. Public shareholders first learned the truth after the close of markets on November 7, 2023, when the company announced disappointing earnings results for the third quarter of 2023 and disclosing a decline in prior authorization submissions for patients seeking Inspire therapy. On this news, Inspire Medical’s stock price fell $31.79 per share, from a closing price of $161.74 per share on November 7, 2023, to a closing price of $129.65 per share on November 8, 2023. On December 22, 2023, a class action complaint was filed on behalf of shareholders that suffered a loss.

Class Action Filed Against ON Semiconductor Corporation

ON Semiconductor Corporation (ON) manufactures and sells semiconductor components for various electronic devices worldwide, including power and sensing solutions, and technologies for the electrification of the automotive industry. Critical to the company’s long-term growth and success are the development, manufacture, and sale of a variety of products incorporating silicon carbide (SiC) that are necessary components used in electric vehicles production. The company made repeated public statements to investors regarding the “stability” and “visibility” of the demand for the company’s SiC and other products, and the sustainability of the company’s revenue growth, including that the company had over $17 billion of long-term supply agreements – $9 billion of which were for SiC products.

However, during the investor earnings call on October 30, 2023, the company’s chief executive officer publicly disclosed that the company was “taking a very cautious approach” with its SiC products due to signs of a weakening demand in the company’s automotive business segment (which generates between 75% and 90% of the company’s SiC revenues), while also revealing that the company would miss its $1 billion 2023 SiC revenue target by approximately $200 million. In reaction to this news, On Semiconductor stock plummeted $18.18 per share, from a close of $83.52 per share on October 27, 2023, to close at $65.34 per share on October 30, 2023. On December 13, 2023, a class action complaint was filed on behalf of shareholders that suffered a loss.

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