The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Li-Cycle Holdings Corp. f/k/a Peridot Acquisition Corp. (“Li-Cycle” or the “Company”) (NYSE: LICY) securities between February 16, 2021 and March 23, 2022, inclusive (the “Class Period”). Li-Cycle investors have until June 20, 2022, to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On August 10, 2021, Li-Cycle merged with special purpose acquisition company, Peridot Acquisition Corp.
On March 24, 2022, Blue Orca Capital published a report which described Li-Cycle as a “near fatal combination of stock promotion, laughable governance, a broken business hemorrhaging cash and highly questionable Enron-like accounting.” The report also alleged, among other things, that Li-Cycle had “diverted $529,902 in investor capital to the family [] of its founders through a series of highly questionable related party payments,” and that its “cash burn is so severe and far above previous guidance” which “will require the Company to raise at least $1 billion . . . in large part by massively diluting current shareholders.” The Report further stated that the Company’s largest customer, Traxys, is not actually a customer, but a “broker or marketing partner that on-sells Li-Cycle’s black mass to end buyers,” and that “not only is Traxys not the end buyer, but the revenue recognized by Li-Cycle is merely Li-Cycle’s initial estimate of the price of the product it expects to receive from the end customer once the final deal is complete.”
On this news, Li-Cycle’s stock fell $0.47, or 5.6%, to close at $7.93 per share on March 24, 2022, thereby injuring investors.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Li-Cycles largest customer, Traxys North America LLC, is not actually a customer, but merely a broker providing working capital financial to the Company while Traxys tries to sell Li-Cycles product to end customers; (2) the Company engaged in highly questionable related party transactions; (3) the Company’s mark-to-model accounting is vulnerable to abuse and gave a false impression of growth; (4) a significant portion of the Company’s reported revenues were derived from simply marking up receivables on products that had not been sold; (5) the Company’s gross margins have likely been negative since inception; (6) the Company will require an additional $1 billion of funding to support its planned growth (which is a figure greater than the Company raised via the merger); and (7) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times. Follow us for updates on Twitter: twitter.com/FRC_LAW.
If you purchased Li-Cycle securities during the Class Period, you may move the Court no later than June 20, 2022, to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Li-Cycle securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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The Law Offices of Frank R. Cruz Announces the Filing of a Securities Class Action on Behalf of Li-Cycle Holdings Corp. f/k/a Peridot Acquisition Corp. (LICY) Investors
Contacts
The Law Offices of Frank R. Cruz, Los Angeles
Frank R. Cruz, 310-914-5007
fcruz@frankcruzlaw.com
www.frankcruzlaw.com
