GXY 0.00% $5.28 galaxy resources limited

Banter and General Comments, page-6564

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    Some events within the lithium community RE: Livent and Nemaska...

    According to the lawsuit, Defendants made false and/or misleading statements in the offering documents relating to the IPO, including failing to disclose that: (i) a supply contract with Nemaska Lithium Inc. had been terminated; (ii) the Company would be forced to fulfill its customer contracts using alternative vendors at reduced revenues and lower margins; (iii) the Company had a long-standing contract to supply lithium hydroxide to a customer at a much lower price than any of Livent’s existing contracts; (iv) the Company’s margins were squeezed due to that customer’s increased orders; and (v) as a result of the foregoing, Defendants’ positive statements about Livent’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.

    On February 11, 2019, Livent released its fourth quarter 2018 financial results that missed top line sales targets, citing difficulties negotiating contracts with existing customers. On this news, Livent’s share price fell $0.57, over 4%, to close at $12.55 per share on February 12, 2019.

    On May 8, 2019, Livent announced disappointing financial results for first quarter 2019, citing further customer issues. On this news, the Company’s share price fell $1.70, nearly 16%, to close at $9.03 per share on May 8, 2019.

    LINK

    Livent Accused of Inflating its IPO Price

    According to the complaint, Livent held its IPO in October 2018, and received approximately $369 million in proceeds. However, prior to the IPO, Livent failed to disclose in its registration statement that a key supply contract had been terminated. Rather, Livent made false assurances that it had reached an agreement on the final wording of a new supply agreement with the vendor. As a result of the contract termination, Livent was forced to fulfill customer contracts using alternative vendors at reduced revenues and lower margins. Since the truth was revealed, Livent's stock price has declined sharply. As of May 30, 2019, Livent's stock was trading as low as $6.36 per share, an over 60% decline from the $17 per share IPO price.

    LINK

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