NEW YORK, August 06, 2021--(BUSINESS WIRE)--Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of investors that purchased or otherwise acquired Zymergen Inc. ("Zymergen" or the "Company") (NASDAQ: ZY) securities pursuant and/or traceable to the offering documents issued in connection with Zymergen’s April 2021 initial public offering (the "IPO"). Investors have until October 4, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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In April 2021, Zymergen completed its IPO, selling approximately 18.5 million shares of common stock at $31 per share.
On August 3, 2021, after the market closed, 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 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." The Company also announced that its CEO was stepping down, effective immediately.
On this news, the Company’s stock price fell $26.58 per share, or 76%, to close at $8.25 per share on August 4, 2021, representing a nearly 73% decline from the IPO price.
The Registration Statement was materially false and misleading and omitted to state material adverse facts. Specifically, Defendants failed to disclose to investors: (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, the Company overestimated demand for its products; (4) that, as a result of the foregoing, the Company’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 the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
If you purchased Zymergen shares pursuant and/or traceable to the IPO and suffered a loss, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at email@example.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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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.
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