Origin Materials, Inc. (ORGN) Misled Investors Regarding Construction of its Origin 2 Plant and Product Focus
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Origin Materials, Inc. (NASDAQ: ORGN) securities between February 23, 2023 and August 3, 2023. Origin is a sustainable materials company that purports to have developed a platform to convert the carbon found in biomass into carbon negative materials that can replace the petroleum-based substances typically used in various end products.
According to the complaint, On August 9, 2023, Origin announced that it was significantly delaying the timeline for construction on its Origin 2 commercial plant and changing the product slate at Origin 2 from a focus on paraxylen to a focus on furandicarboxylic acid. The Company disclosed that it “now expects Origin 2 to be completed in two phases, with Phase 1 estimated to be completed in late 2026 to 2027, and Phase 2 estimated to be completed in 2028, compared with our initial expectation for a mid-2025 completion.” Origin blamed the delay on the “high-cost environment” for capital projects. The Company further revealed that the construction would cost more and yield less capacity than previously announced. On this news, Origin’s stock price fell $2.88 per share, or 66.5%, to close at $1.45 per share on August 10, 2023.
The complaint alleges that during the class period, defendants failed to disclose that: (1) Origin would be unable to meet its previously announced timeline for the construction of the Origin 2 plant; (2) demand for paraxylen had dropped such that it would not be the production focus of Origin 2; and (3) Origin could not construct Origin 2 at its previously disclosed cost or at the scale it had previously identified.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Origin Materials, Inc. Shareholders who want to act as lead plaintiff for the class must file their papers with the court by October 24, 2023. 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.
