SAN
DIEGO, Dec. 20, 2023 /PRNewswire/ -- DiCello
Levitt LLP announces that purchasers or acquirers of Mercury
Systems, Inc. ("Mercury" or the "Company" – NASDAQ: MRCY) common
stock between December 7, 2020 and
June 23, 2023, inclusive (the "Class
Period") have until February 12, 2024
to seek appointment as lead plaintiff of the Mercury class action
lawsuit. The lawsuit charges Mercury and certain of its
former senior executive officers with violations of the Securities
Exchange Act of 1934.
If you purchased shares of Mercury securities between
December 7, 2020 and June 23, 2023, and suffered substantial losses,
and you wish to serve as lead plaintiff in this lawsuit, you may
submit your information here:
https://dicellolevitt.com/securities/mercury-systems/. You
can also contact DiCello Levitt partner Brian O'Mara by calling (888) 287-9005 or at
investors@dicellolevitt.com.
No Class Has Been Certified. Until a class is certified,
you are not represented by counsel unless you retain one. You
may select counsel of your choice. You may also remain an
absent class member and do nothing at this point. An
investor's ability to share in any potential future recovery is not
dependent upon serving as lead plaintiff.
Allegations
Mercury is a technology company that produces component modules
and subsystems for the defense and aerospace industries.
According to the lawsuit, during the Class Period, Mercury misled
investors and failed to disclose that Mercury's serial-acquirer
strategy was not working and the Company was using improper revenue
recognition practices such as changing to long-term contracts to
mask deteriorating organic growth. The lawsuit also
alleges that Mercury failed to
disclose that its acquisition of Physical Optics Corp. ("POC")
would cause POC to lose its small business accreditation and
prevent POC from winning contracts that made up a large portion of
its historical business. Defendants further failed to
disclose that Mercury's 1MPACT initiative to increase margins was
not working and was eroding margins.
The lawsuit alleges that a
July 26, 2022 short seller report
issued by Glasshouse Research revealed that: (i) Mercury had
overstated organic growth; (ii) the POC acquisition had been a
"disaster" which was utilized to obscure Mercury's financial
results; (iii) 1MPACT was a failure; and (iv) Mercury's management
prematurely recognized revenue on significant projects to
artificially boost both revenue and earnings unsustainably which
also caused the Company's working capital and unbilled receivables
to swell far beyond industry norms. The Glasshouse Report
attributed this premature revenue recognition to Mercury's
executives, noting that management "juice[d] the numbers in their
favor" to meet revenue and adjusted EBITDA targets, on which the
executives' compensation was based. On this news, the
Company's share price fell $4.87 per
share, from $62.13 per share on
July 25, 2022, to $57.26 per share on July
26, 2022.
Then, on May 2, 2023, Mercury
announced poor third quarter of 2023 earnings and lower margins
that caused the Company to slash its full year 2023 guidance.
Mercury also disclosed that approximately a dozen of its
300-plus active programs had been negatively affected by higher
costs related to supply chain and labor inefficiencies,
manufacturing constraints, and inflation. Mercury continued
to downplay the significance of these issues, however, claiming
that these "challenges" were "not unique to Mercury" and that
"structurally, our business model and financial outlook are sound."
On this news, the price of the Company's common stock
declined $7.84 per share, or 17.3%,
to close at $37.44 per share on
May 3, 2023.
Then, on June 23, 2023, Mercury
announced that its Chief Executive Officer had abruptly resigned,
and that the Company's recent strategic review of acquisition
alternatives did not result in the sale of the Company. On
this news, Mercury's share price declined an additional
$3.37 per share, or 9.6%, to close at
$31.50 per share on June 26, 2023, erasing billions in market
capitalization.
About DiCello Levitt
At DiCello Levitt, we are dedicated to achieving justice for our
clients through class action, business-to-business, public client,
whistleblower, personal injury, civil and human rights, and mass
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or otherwise – for people who have suffered harm, global
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interests. Every day, we put our reputations – and our
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similar outcome.
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SOURCE DiCello Levitt LLP