Danimer Scientific, Inc.
Danimer is Georgia-based plastics manufacturer that produces PHA biodegradable plastic sold under the name Nodax. On March 20, 2021, the Wall Street Journal published an article titled “Plastic Straws That Quickly Biodegrade in the Ocean? Not Quite, Scientists Say.” which stated that that although “Nodax breaks down far more quickly than fossil-fuel plastics… many claims about Nodax are exaggerated and misleading, according to several experts on biodegradable plastics.” The article further claimed that, according to several experts on biodegradable plastics, “many claims about Nodax are exaggerated and misleading.” While Danimer reportedly asserts its claims are factual, the article cites at least one expert as stating that making broad claims about Nodax’s biodegradability “is not accurate” and is “greenwashing.”
On March 22, 2021, the first trading day following publication of the Wall Street Journal article, Danimer’s stock price fell $6.43 per share, or 12.87%, to close at $43.55 per share on March 22, 2021.
A securities class action has been filed against Danimer on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Danimer securities between December 30, 2020 through March 19, 2021. This case has been filed in the U.S. District Court for the Eastern District of New York.
The Complaint alleges that Defendants failed to disclose to investors that: (i) Danimer had deficient internal controls; (ii) as a result, the Company had misrepresented, inter alia, its operations’ size and regulatory compliance; (iii) Defendants had overstated Nodax’s biodegradability, particularly in oceans and landfills; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
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