New York, New York--(Newsfile Corp. - September 23, 2021) - Wolf Popper LLP announces that a that federal securities class action lawsuit has been filed in the U.S. District Court for the Northern District of California against Zymergen Inc. and certain of its officers, directors, and underwriters for its April 2021 initial public offering (IPO). The class action is brought on behalf of investors who purchased or otherwise acquired Zymergen common stock (NASDAQ: ZY) pursuant and/or traceable to the registration statement and prospectus issued in connection with Zymergen's April 2021 IPO.
The deadline for Zymergen investors to seek appointment as the lead plaintiff is October 4, 2021.
Zymergen purports to design, develop, and commercialize breakthrough products faster, cheaper, and greener than before through what Zymergen calls biofacturing. Zymergen's first product is called Hyaline, an optical film designed for electronic companies to use for display touch sensors, which will purportedly enable customers to make foldable touchscreens and high density flexible printed circuits. Hyaline was launched in December 2020 but has not generated revenue because it is still in its qualification process with customers.
Zymergen held its initial public offering on April 21, 2021 and sold 18.54 million shares at $31.00 per share.
After the market closed on August 3, 2021, Zymergen provided a business update and disclosed Zymergen "recently became aware of issues with its commercial product pipeline that will impact Zymergen's delivery timeline and revenue projections." Specifically, "several key target customers encountered technical issues in implementing Hyaline into their manufacturing processes," and Zymergen also found that its total addressable market appears to be smaller than previously expected. As a result, Zymergen "no longer expects product revenue in 2021, and expects product revenue to be immaterial in 2022." Furthermore, Zymergen said its current Chief Executive Officer, Josh Hoffman, was stepping down as CEO and as a member of the board.
On August 4, 2021, the price of Zymergen common stock fell $26.58 per share, or more than 76%, from its August 3, 2021 closing price and closed at $8.25 per share on August 4, 2021, on unusually heavy trading volume.
The Zymergen securities class action alleges that the registration statement and prospectus issued in connection with Zymergen's IPO were materially false and misleading and omitted to state (1) that, during the qualification process for Hyaline, key customers had encountered technical issues, including product shrinkage and incompatibility with customers' processes; (2) that, though the qualification process was critical to achieving market acceptance for Hyaline and generating revenue, Zymergen lacked visibility into the qualification process; (3) that, as a result, Zymergen overestimated demand for its products; (4) that, as a result of the foregoing, Zymergen's product delivery timeline was reasonably likely to be delayed, which in turn would delay revenue generation; and (5) that, as a result of the foregoing, Defendants' positive statements about Zymergen's business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Zymergen securities pursuant or traceable to Zymergen's IPO to ask the court to be appointed as lead plaintiff in the Zymergen securities class action litigation. A lead plaintiff acts on behalf of all other class members in directing the class action lawsuit, and can select a law firm of its choice to litigate the class action lawsuit. A court will generally appoint as lead plaintiff the movant with the greatest financial interest in the relief sought by the proposed class of investors and that is also typical and adequate of the proposed class. An investor's ability to share in any potential future recovery obtained in the litigation is not dependent upon serving as lead plaintiff.
If you wish to serve as lead plaintiff in the Zymergen securities class action litigation or have questions concerning your rights regarding the Zymergen securities class action litigation, please contact Joshua Ruthizer at (212) 451-9668, (877) 370-7703, or firstname.lastname@example.org. The deadline for Zymergen investors to seek appointment as the lead plaintiff is October 4, 2021.
Wolf Popper has successfully recovered billions of dollars for defrauded investors. Wolf Popper's reputation and expertise have been repeatedly recognized by the courts, which have appointed the firm to major positions in securities litigation. For more information about Wolf Popper, please visit the Firm's website at www.wolfpopper.com.
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