Impinj, Inc. (PI) Accused of Misleading Investors Regarding Product Demand

According to the filed complaint against the company's officers and directors for breaches of their fiduciary duties from November 3, 2016 to the present, Impinj, Inc. (PI) experienced a significant increase in customers in 2016, which caused production delays that resulted in increased lead times. The company told investors that it was increasing inventory levels to meet rising market demands, but the truth was that the increased sales Impinj boasted about were the result of customers temporarily purchasing more inventory to account for longer production lead times.

On August 3, 2017, the company reduced its full-year forecasts, blaming customers' delayed expansion as opposed to decline in demand. On November 1, 2017, the company lowered fourth quarter guidance due to "a decline in endpoint IC demand" attributable to customers "adjusting from a transition where we had constrained supply and long lead times to us having a buffer stock in short lead times now."

Then, on August 2, 2018, Impinj announced the company would delay its earnings release, earnings call, and the filing of its quarterly report on Form 10-Q with the SEC for its second quarter ended June 30, 2018. The press release also announced that a former employee had filed a complaint with the company and that the audit committee had commenced an independent investigation. Impinj stock now trades significantly lower than prior to the alleged wrongdoing.

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