Li-Cycle Holdings Corp. (LICY) f/k/a Peridot Acquisition Corp. (PDAC) Misrepresented its Business Prospects to Investors
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Li-Cycle Holdings Corp. (NYSE: LICY) securities between February 16, 2021 and March 23, 2022, for violations of the Securities Exchange Act of 1934. Li-Cycle purports to be an industry leader in lithium-ion battery resource recovery and the leading lithium-ion battery recycler in North America.
According to the complaint, Li-Cycle merged with Peridot Acquisition Corp., a special purpose acquisition company, on August 10, 2021. During the class period, defendants touted Li-Cycle’s patented technology and noted that the merger would enable Li-Cycle “to fully fund its planned global expansion.” However, defendants failed to disclose that Li-Cycle’s largest customer was merely a broker providing working capital financial to the Company while trying to sell the product to end customers. Further, Li-Cycle engaged in questionable related party transactions. With regard to accounting, the Company gave a false impression of growth, reported revenues derived by marking up receivables on unsold products, and concealed that the Company would need an additional $1 billion to support planned growth.
The truth came to light on March 24, 2022, when market researcher Blue Orca Capital released a report describing the Company as “a near fatal combination of stock promotion, laughable governance, a broker business hemorrhaging cash, and highly questionable Enron-like accounting” and detailing the Company’s failings. On this news, Li-Cycle’s shares fell approximately 5.6%, to close at $7.93 per share on March 24, 2022.
Next Steps: If you acquired shares of Li-Cycle Holdings Corp. (LICY) between February 16, 2021 and March 23, 2022, you have until June 20, 2022, to ask the court to appoint you lead plaintiff for the class. 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.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
