View, Inc. (VIEW) May Have Misrepresented its Previously Disclosed Warranty Accruals
On November 30, 2020, CF Finance Acquisition Corp. II and View announced they had entered into a definitive merger agreement. On March 8, 2021, CF Finance Acquisition Corp. II and View combined via a business combination with View as the surviving public entity.
According to a class action complaint filed on behalf of purchasers of View, between November 30, 2020 and August 16, 2021, View stated that it had recorded a one-time warranty accrual of $24.5 million during the nine months ended September 30, 2019. On August 16, 2021, View announced it “began an independent investigation concerning the adequacy of the company’s previously disclosed warranty accrual.” On this news, the Company’s share price fell $1.26, or over 24%, to close at $3.92 per share on August 17, 2021.
It appears that View had not properly accrued warranty costs related to its product and that there was a material weakness in View’s internal controls over accounting and financial reporting related to warranty accrual. As a result, View misstated its financial results.
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