Franklin Wireless Corp. (FKWL) Accused of Failing to Disclose its Hotspot Devices Suffered from Battery Issues
According to a class action complaint filed on behalf of purchasers of Franklin Wireless, on April 1, 2021, Franklin stated that it “ha[d] been notified of reports of battery issues in some of its wireless hotspot device” and that it was “working with its battery and device manufacturing partners and carrier customer to determine the cause and extent of the problem.” Then, on April 8, media reported that Verizon Wireless “is recalling 2.5 million hotspot devices after discovering that the lithium ion battery can overheat, creating a fire and burning hazard.” The “recall impacts Ellipsis Jetpack mobile hotspots imported by Franklin Wireless Corp and sold between April 2017 and March 2021.” On this news, the stock price fell 14%, to close at $17.33 per share on April 8. 2021. The next day, Franklin announced that Verizon “has issued a voluntary recall of its Jetpack Hotspot devices imported by Franklin.” On this news, Franklin’s stock price fell nearly 23%, to close at $13.26 per share on April 9, 2021.
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