Kaplan Fox Files Class Action to Recover Losses for Investors Who Purchased Securities of Romeo Power Inc. (NYSE: RMO, RMO.WT), f/k/a RMG Acquisition Corp. (NYSE: RMG, RMG.WS)

Friday, 16. April 2021 23:32

NEW YORK, April 16, 2021 (GLOBE NEWSWIRE) -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit in the United States District Court for the Southern District of New York against Romeo Power Inc. (“Romeo” or the “Company”) (NYSE: RMO), formerly known as RMG Acquisition Corp. (“RMG”) (NYSE: RMG); Lionel E. Selwood, Jr., the Company’s President and Chief Executive Officer, and a member of the Company’s board of directors; Lauren Webb, the Company’s Chief Financial Officer and a member of the Company’s board of directors; as well as certain current directors of Romeo, and former directors of RMG.

The Complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder by the SEC, and is brought by plaintiff on behalf of all persons and entities who purchased the publicly traded securities of Romeo during the period October 5, 2020 through March 30, 2021, inclusive (“Class Period”).

If you are a member of the proposed Class, you may move the court no later 60 days from today to serve as a lead plaintiff for the proposed Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.

The Complaint alleges that on December 29, 2020, Romeo announced that it completed its business combination with RMG. The business combination was approved by RMG stockholders in a special meeting held on December 28, 2020 and consummated on December 29, 2020.

The Complaint further alleges that Defendants represented that for 2020 Romeo estimated revenue of $11 million, and for 2021 Romeo estimated revenue of $140 million. The Complaint further alleges that Defendants represented that Romeo had the capacity and supply to meet end-user demand for Romeo’s products, that Romeo was not beholden “to any level of the value chain”, that its supply was hedged, and that they did not see any material challenges that would hamper growth.

The Complaint further alleges that during the Class Period, unknown to investors, Romeo was suffering from an acute shortage of high quality battery cells, which are key raw materials for Romeo’s battery packs and modules, due to supply constraints. Contrary to Defendants’ representations, (i) Romeo had only two battery cell suppliers, not four, (ii) the future potential risks that Defendants warned of concerning supply disruption or shortage had already occurred and were already negatively affecting Romeo’s business, operations and prospects, (iii) Romeo did not have the battery cell inventory to accommodate end-user demand and ramp up production in 2021, (iv) Romeo’s supply constraint was a material hindrance to Romeo’s revenue growth, and (v) Romeo’s supply chain for battery cells was not hedged, but in fact, was totally at risk and beholden to just two battery cell suppliers and the spot market for their 2021 inventory. Given the supply constraint that Romeo was experiencing during the Class Period, Defendants had no reasonable basis to represent that the Company had the ability to meet customer demand and that it would support growth in revenue in 2021.

When the true details entered the market on March 31, 2021, Romeo shares declined from a closing price on March 30, 2021 of $10.37 per share to close at $8.33 per share, a decline of $2.04 per share, or almost 20%, on heavier than usual volume of over 20 million shares.

Plaintiff seeks to recover damages on behalf of the proposed Class and is represented by Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com). Our firm, with offices in New York, Oakland, California, Los Angeles, Chicago, and New Jersey, has decades of experience in prosecuting investor class actions and actions involving violations of the Federal securities laws.

If you have any questions about this Notice, the action, your rights, or your interests, or would like a copy of the Complaint, please e-mail attorneys Jason Uris (juris@kaplanfox.com), or Larry King (lking@kaplanfox.com), or contact them by phone, regular mail, or fax:

Jason A. Uris
850 Third Avenue, 14th Floor
New York, NY 10022
Telephone: (646) 315-9007
Fax: (212) 687-7714
E-mail address: juris@kaplanfox.com
Laurence D. King
1999 Harrison Street, Suite 1560
Oakland, CA 94612
Telephone: (415) 772-4700
Fax: (415) 772-4707
E-mail address: lking@kaplanfox.com

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