A securities class action has been filed against Enviva, Inc. (EVA) on behalf of all persons who purchased or otherwise acquired Enviva between November 3, 2022 through May 3, 2023. This case has been filed in the USDC – S.D.MD.
The Complaint alleges that the Defendants made statements that were materially false and misleading, or failed to disclose material information necessary to make such statements not misleading. Specifically, from November 3, 2022 through April 3, 2023 (only one month before announcing the first quarter 2023 results), Enviva and its senior officers, made statements that Enviva was on track to achieve, for fiscal year (FY) 2023, EBITDA of $305-$335 million and a yearly dividend payout of $3.62 per share. They also represented that the liquidity of the company, going into 2023, was “strong” and its leverage ratio could be maintained at a “conservative” 3.6x-3.7x even after taking into account the proposed dividend payouts. Defendants’ false statements were premised on misrepresentations of existing fact. Upon resetting expectations, these revisions were blamed on (a) customer mix impacting results; (b) unplanned repairs and maintenance expenses; (c) professional fees; and (d) shipments subject to deferred gross margin accounting. The revelation of the true financial condition of the Company led Enviva’s common stock price to collapse $14.34 per share from $21.35 per share to $7.01 per share or down 67.2% on enormous volume.