| COMPANY |
Stem, Inc. f/k/a Star Peak Energy Transition Corp. |
| COURT |
United States District Court for the Northern District of California |
| CASE NUMBER |
23-cv-02329 |
| JUDGE |
The Hon. Maxine M. Chesney |
| CLASS PERIOD |
March 04, 2021 and February 16, 2023 |
| SECURITY TYPE |
Securities |
Stem investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described below, you may no later than July 11, 2023 move the Court to serve as lead plaintiff of the class, if you so choose.
A class action lawsuit has been filed on behalf of those who purchased or otherwise acquired
Case Background:
December 4, 2020, Star Peak Energy Transition Corp., a publicly traded special purpose acquisition company (SPAC) announced that it had entered into a definitive agreement to merge with Stem, Inc., a private Delaware corporation and a purported global leader in AI-driven clean energy storage systems, that would result in a combined company with an estimated equity value of approximately $1.35 billion. In the months leading up to the merger, various filings were made with the SEC including a Registration Statement and Prospectus. On April 28, 2021, the merger was consummated and renamed itself “Stem, Inc.”. The following day, April 29, 2021, the company began publicly trading on the NYSE under the ticker symbol “STEM”.
Leading up to and following the merger, Stem repeatedly represented that its unique AI-driven approach to energy storage management and related software products and offerings, which it offered alongside its hardware products and offerings, afforded the company significant competitive advantages in attracting and retaining business partners and customers, and that these advantages differentiated Stem’s business from its competitors.
On January 11, 2023, market analyst Blue Orca Capital published a report alleging various undisclosed issues with Stem’s business and financial prospects, including that the company had overstated its software revenues by falsely claiming that the entirety of its services revenue line was attributable to software revenues.
On February 16, 2023, Stem released its fourth quarter 2022 results and its 2023 guidance, reporting a fourth quarter revenue of $156 million, missing consensus estimates by $10 million, and issued disappointing 2023 revenue guidance, missing consensus estimates by as much as $97 million. Following this news, Stem’s stock price fell $1.44, or 14.8%, to close at $8.30 per share on February 17, 2023.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose materially adverse facts about the company’s business, operations, and prospects. Specifically, the Offering Documents and Defendants failed to disclose to investors that: (1) Stem suffered from material weaknesses in internal control over financial reporting related to accounting for deferred cost of goods sold and inventory, certain revenue recognition calculations, and internal-use capitalized software calculations; (2) the company had overstated Stem’s and its own post-Merger business and financial prospects; (3) Stem’s software revenue did not make up 100% of the company’s services revenue; (4) Stem had overstated the benefits expected to flow from its AP partnership; and (5) 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.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.