After the market closed on October 24, 2023, SunPower disclosed a material weakness in its internal controls over financial reporting and that the Company would be restating certain previously issued financial statements for fiscal year 2022 and the first two quarters of 2023.
SunPower explained that it had overstated the value of consignment inventory of certain microinverter components, causing it to understate the associated cost of revenue.
On this news, SunPower’s stock price fell 18.1% on October 25, 2023, on unusually high trading volume.
Throughout the Class Period, Defendants made materially false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants misled investors by failing to disclose that: (1) due to a material weakness in its internal control over financial reporting, the Company had inaccurately reported cost of revenue and inventory metrics; (2) as a result of the foregoing the Company was reasonably likely to incur significant charges to restate prior reporting; and (3) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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