On January 20, 2022, SunPower announced that it had identified a cracking issue that developed over time in certain factory-installed connectors. The Company expects approximately $27 million of supplier-quality related charges in fourth quarter 2021 and approximately $4 million in the first quarter of 2022 to replace the faulty connectors. On this news, the Companys share price fell $3.22, or 16.9%, to close at $15.80 per share on January 21, 2022, on unusually heavy trading volume. 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 Companys business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that certain connectors used by SunPower suffered from cracking issues; (2) that, as a result, the Company was reasonably likely to incur costs to remediate the faulty connectors; (3) that, as a result of the foregoing, SunPowers financial results would be adversely impacted; and (4) that, as a result of the foregoing, Defendants positive statements about the Companys business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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