Enviva Inc. (EVA) Misled Investors About its Business Prospects
A shareholder filed a class action on behalf of all persons who purchased or otherwise acquired Enviva Inc. (NYSE: EVA) common stock between November 3, 2022 and May 3, 2023. Enviva is a Maryland-based company that develops, constructs, acquires, and operates fully contracted wood pellet production plants.
According to the complaint, during the class period, defendants failed to disclose to investors material information about the financial condition of the Company including its EBITDA and net loss forecasts, liquidity position, capital allocations, operation costs, productivity and the impact of these metrics on the Company’s ability to continue paying dividends in 2023.
Between November 3, 2022 and April 3, 2023, Enviva and its senior officers touted the Company’s ability to achieve a yearly dividend payout of $3.62 per share, represented that the liquidity of the Company was “strong,” and reiterated that the Company’s adjusted EBITDA for 2023 was in the range of $305 million to $335 million.
However, on May 3, 2023, defendants dramatically lowered their FY 2023 guidance downward and suspended Enviva’s dividend payments going forward. Defendants now projected that Enviva’s 2023 EBITDA would be in the range of $200-250 million, net loss would be substantially higher, increasing to a range of $136-$186 million, and Enviva’s $0.905 per share quarterly dividend was eliminated. On this news, Enviva’s common stock price collapsed $14.34 per share from $21.35 per share to $7.01 per share, or down 67.2%.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Enviva Inc. Shareholders who want to act as lead plaintiff for the class should contact the firm. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
