Faruqi & Faruqi Warns DMC Global Investors of Upcoming Class Action Lawsuit

DMC Global Investors: Important Class Action Alert

Faruqi & Faruqi, LLP, a prominent national law firm specializing in securities litigation, is currently investigating potential claims against DMC Global Inc. (referred to as “DMC” or “the Company”). The firm has issued a reminder to investors regarding an upcoming deadline concerning a federal securities class action lawsuit against DMC, which is set for February 4, 2025.

Background on DMC Global Inc.

DMC Global is recognized for its contribution to the energy sector, focusing on various products and services that serve oil and gas markets. However, recent developments have raised concerns about the Company's operational integrity and disclosure practices. Investors who faced losses surpassing $75,000 between May 3, 2024, and November 4, 2024, are particularly encouraged to reach out to Faruqi & Faruqi for guidance on their legal options.

Allegations Against DMC

The lawsuit asserts that DMC and its executives have violated federal securities laws by issuing misleading statements and failing to disclose crucial information that materially affected investors. Specifically, allegations include:
1. Overstated Goodwill: The goodwill attributed to Acadia Products has been claimed to be exaggerated, influenced by negative circumstances impacting that segment.
2. Internal Systems Ineffectiveness: DMC's internal processes were reportedly inadequate, negatively influencing operations and misrepresenting the Company’s overall performance.
3. Misleading Public Statements: Investors were led to believe that DMC’s public disclosures were accurate when, in reality, they lacked a reasonable basis.

Recent Developments

On October 21, 2024, DMC made a disappointing announcement revising its financial forecast for the quarter ending September 30, 2024. The Company revealed that its adjusted EBITDA was expected to be around $5 million—a stark drop from the initially expected range of $15 to $18 million. This downgrading was compounded by additional news of charges relating to inventory and bad debts amounting to around $5 million at one of its subsidiaries, DynaEnergetics.

Furthermore, DMC disclosed a non-cash goodwill impairment charge of approximately $142 million linked to its acquisition of a controlling interest in Arcadia in December 2021. These revelations negatively affected the stock's market value, with a notable decline of $2.36 per share (18.3%) observed following the announcement on October 22.

What This Means for Investors

Investors impacted by these developments may be eligible to become lead plaintiffs in the class action, a role that allows them to direct the litigation on behalf of the group. Any member of the purported class can apply to serve as a lead plaintiff through their legal counsel or choose to remain an absent class member without affecting their potential recovery. Importantly, being a lead plaintiff does not guarantee a higher recovery amount.

Faruqi & Faruqi is also inviting any individuals with insider information regarding DMC’s operations, such as whistleblowers or former employees, to reach out to the firm. This could be critical in strengthening the case against DMC.

How to Get Involved

To learn more about the DMC Global class action and your rights as an investor, visit Faruqi & Faruqi’s website or contact Josh Wilson, a partner at the firm, directly at 877-247-4292 or 212-983-9330 (Ext. 1310).

Stay informed about your rights and the potential legal actions surrounding DMC Global. Your prompt action could significantly impact the outcome of this class action lawsuit.