Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Maxeon and GameStop and Encourages Investors to Contact the Firm

/EIN News/ -- NEW YORK, July 11, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Maxeon Solar Technologies, Ltd. (NASDAQ: MAXN), and GameStop Corp. (NYSE: GME). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.

Maxeon Solar Technologies, Ltd. (NASDAQ: MAXN)

Class Period: November 15, 2023 - May 29, 2024

Lead Plaintiff Deadline: August 26, 2024

On May 30, 2024, before the market opened, Maxeon announced financial results for first quarter 2024 in a press release, reporting a 41% year-over-year decline in revenue to $187.5 million. The Company disclosed that it was “facing a serious cash flow challenge” as the result of, in part, the termination of the SunPower supply agreement. The Company revealed that, as a result, it was forced to “negotiate[] commitments for significant liquidity support” which will result in “substantial dilution to existing public shareholders, with TZE [TCL Zhonghuan Renewable Energy Technology Co. Ltd.] ultimately becoming a controlling shareholder.”

On this news, the Company’s share price fell 34.7%, or $1.08, to close at $2.03 per share on May 30, 2024, 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 Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Maxeon relied on the exclusive sales of certain products to SunPower; (2) that, following the termination of the Master Supply Agreement, the Company was unable to “aggressively ramp sales”; (3) that, as a result, revenue substantially declined; (4) that, as a result, the Company suffered a “serious cash flow” crisis; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

For more information on the Maxeon class action go to: https://bespc.com/cases/MAXN

GameStop Corp. (NYSE: GME)

Class Period: May 13, 2024 - June 13, 2024

Lead Plaintiff Deadline: August 27, 2024

GameStop is a specialty retailer that provides games and entertainment products through its stores and ecommerce platforms in the U.S., Canada, Australia, and Europe. GameStop’s principal executive offices are located at 625 Westport Parkway, Grapevine, Texas 76051. The Company’s Class A common stock trades in an efficient market on the New York Stock Exchange under the ticker symbol “GME.”

Defendant Keith Patrick Gill, known as “Roaring Kitty” on YouTube and the social media platform X (f/k/a Twitter), as well as “DeepF***ingValue” (“DFV”) on the social media platform Reddit, is an American financial analyst and investor, as well as former financial analyst for Massachusetts Mutual Life Insurance Company, also referred to as “MassMutual.” Defendant is also a former registered stockbroker who holds several securities-industry licenses, as well as one of GameStop’s largest shareholders. As of June 2024, Defendant had over 1.6 million followers on X, 982,000 subscribers on YouTube, 116,000 members on his personal subreddit “r/roaringkitty” (ranked “Top 2%” in size among top Reddit communities), and 200,000 members on his personal subreddit “r/DeepF***ingValue.”

Defendant was a key figure in the so-called “meme stock” movement, which saw shares of GameStop and a handful of other companies surge as much as twenty-one-fold over two weeks in January 2021 before crashing to pre-surge levels in the subsequent days. Meme stocks are stocks that gained viral popularity on discussion threads on social media platforms like Reddit and X, where online communities of retail investors dedicated their attention to particular stocks, sometimes for purposes of initiating a squeeze on short investors and hedge funds, and other times based on genuine beliefs about a company’s prospects.

Defendant’s ability to rally a massive following of retail investors to purchase and hold GameStop securities through his social media posts is well-documented. In 2021, after the meme stock movement sparked chaos in the financial markets as major hedge funds and others lost billions of dollars in short-squeeze events, Defendant testified before the U.S. House Committee on Financial Services about the meme stock movement as the perceived champion and face of that movement for GameStop investors. In fact, Defendant is largely credited as sparking the meme stock movement and, in 2023, a biographical film called Dumb Money was released chronicling these events and Defendant’s subsequent rise to celebrity status.

Defendant’s last post on Reddit in 2021 showed that his GameStop positions were worth approximately $30 million. Defendant made his fortune as an investor largely, if not entirely, as a result of his participation in the 2021 meme stock movement.

On May 12, 2024, for the first time in nearly three years, Defendant made a post on the social media platform X, which took the form of a meme showing a “gamer”—that is, an individual that plays video games—in a suit, leaning forward in his chair in seeming concentration and/or attention. As reported by multiple news outlets, this meme was widely understood by Defendant’s followers, analysts, and others to mean that Defendant was watching and/or following GameStop’s performance. Over the next few days, Defendant posted a series of subsequent memes on X—largely taking the form of video clips with a battle or fight theme from popular movies and television shows, overlaid with text or other graphics—that were similarly understood to generally reflect Defendant’s renewed interest in GameStop.

As the market reacted to Defendant’s posts, GameStop’s stock price surged, rising by $12.99 per share, or over 74%, to close at $30.45 per share on May 13, 2024—the first trading day following Defendant’s post on X. GameStop’s stock price continued to climb the following trading day, closing at $48.75 per share, an increase of over 179% from the stock’s closing price of $17.46 per share on May 10, 2024—the last trading day before Defendant’s post on X—only to normalize again and close as low as $18.32 per share by May 23, 2024.

The complaint alleges that on Sunday, June 2, 2024, to pump the prices of GameStop’s securities back up, Defendant revealed his large stake in the Company via a post on Reddit, causing GameStop shares to soar more than 70% in early premarket trading on June 3, 2024. In particular, Defendant posted a screenshot of his GameStop portfolio on Reddit through his DFV account, revealing that he owned 5 million shares of GameStop stock and 120,000 GameStop call options with a strike price of $20, which were set to expire on June 21, 2024. Significantly, this post did not reveal when Defendant had purchased these securities.

On June 3, 2024, GameStop’s stock price ultimately closed at $28.00 per share—21% higher than the prior trading day’s closing price of $23.14 per share on May 31, 2024.

On June 3, 2024, shortly before markets closed, the Wall Street Journal (“WSJ”) published an article revealing that Defendant had purchased “a large volume of GameStop options on E*Trade” shortly before his May 12, 2024 post on X that sent GameStop securities soaring. The WSJ reported that “E*Trade is considering telling Defendant that he can no longer use its platform after growing concerned about potential stock manipulation around his recent purchases of GameStop options, according to people familiar with the matter.” The article reported that “[s]hortly before [Defendant] reignited a meme-stock craze in May, he bought a large volume of GameStop options on E*Trade,” and that “[t]his week, Gill posted screenshots of an E*Trade account showing he owns GameStop shares now valued at $140 million and a new set of options that expire later this month. His total gains on the positions were at $85.5 million, he posted late [on June 3], showing his account remained in operation.” The WSJ article stated that “E*Trade and its owner Morgan Stanley” had “concerns [Defendant] can pump up a stock for his own benefit” and are “debat[ing] whether his actions amounted to manipulation[.]” Finally, the article reported that “the Massachusetts securities division is looking into [Defendant]’s activities” and that “[t]he [SEC] has also been reviewing trading in GameStop call options around the time of [Defendant]’s social media posts[.]”

On this news, GameStop’s stock price fell $1.50 per share, or 5.36%, to close at $26.50 per share on June 4, 2024.

Then, on June 13, 2024, during after-market hours, Defendant posted another screenshot of his GameStop portfolio on Reddit through his DFV account, showing that his portfolio no longer included the 120,000 GameStop call options set to expire on June 21, 2024, and that his position in GameStop stock had increased from 5 million shares to over 9 million shares, making him one of the Company’s largest shareholders. Defendant profited handsomely from these transactions. In particular, before his May 12, 2024 post on X that reignited the meme stock movement, GameStop call options were generally trading at less than $3.00 per option contract. After his May 12, 2024 post on X and during the Class Period, the value of these options rose dramatically to an average of $10.16 per option contract, peaking at a closing price of $31.00 per option contract on May 14, 2024 during the Class Period. These same options traded at around $5.00 per option contract as of their June 21, 2024 expiration date.

Following news that Defendant had sold and/or exercised these GameStop call options, GameStop’s stock price fell $4.42 per share, or 15.18%, over three consecutive trading sessions, to close at $24.70 per share on June 18, 2024.

The complaint alleges that Defendant engaged in a pump-and-dump scheme, whereby he: (i) shortly before his May 12, 2024 social media post on X, and unknown to investors, quietly purchased a large volume of GameStop call options on E*Trade at comparatively low prices; (ii) on May 12, 2024, reignited the meme stock movement and pumped the value of GameStop securities with his first social media post on X in nearly three years; (iii) after the prices of GameStop securities had abated, pumped the value of GameStop securities again via a June 2, 2024 post of his GameStop portfolio on Reddit, disclosing his large position in GameStop securities, including 120,000 GameStop call options and 5 million shares of GameStop stock; and (iv) by June 13, 2024, quietly sold and/or exercised (i.e., dumped) all 120,000 of his GameStop call options for a large profit, seemingly to increase his own stake in GameStop stock by over 4 million shares, belatedly revealing as much to investors on June 13, 2024, during after-market hours.

For more information on the GameStop class action go to: https://bespc.com/cases/GME

About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Contact Information:

Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com