Investigation Launched Against Microvast Over Alleged Securities Violations
News related to:Microvast Holdings, Inc · 3 min read
Faruqi & Faruqi, LLP, a leading national securities law firm, has announced an investigation into potential claims against Microvast Holdings, Inc. (NASDAQ: MVST), following a series of disclosures that have raised concerns about the company's financial health and management practices.
The investigation centers on alleged false and misleading statements made by Microvast and its executives during a specific period. According to the firm, the company and its executives violated federal securities laws by overstating their ability to achieve margin targets and the completion of a significant expansion project. These allegations are based on a series of events that unfolded between June 2025 and March 2026.
In June 2025, short seller Grizzly Research released a report alleging that Microvast was fabricating a significant part of its business and capabilities, including overstating the level of activity at its production facilities and the economic opportunities from its commercial partnerships. This report led to a significant drop in Microvast's stock price, with the company's share value plummeting by 10.23% on the day of the report.
On August 1, 2025, Microvast announced the departure of its Chief Financial Officer (CFO), Defendant Schultz, just three months after his appointment. This abrupt change in leadership caused the company's stock to fall by 9.93% on August 4, 2025.
On November 10, 2025, Microvast issued a press release reporting its financial and operating results for the quarter ended September 30, 2025. The release revealed that production following the Huzhou Phase 3.2 expansion would not begin until Q1 2026, contrary to the company's previous assurances that the additional capacity would be online by Q4 2025. This news caused the company's stock to drop by 10% on November 11, 2025.
The final blow came on March 16, 2026, when Microvast reported its financial and operating results for the quarter and year ended December 31, 2025. The release disclosed that gross margin had declined to approximately 1%, down sharply from 36% in the prior year period, due to inventory impairment charges. Revenue for the quarter fell to $96.5 million, a 15% year-over-year decrease and well short of the consensus estimate of $136.4 million. This news caused Microvast's stock to plummet by 34.2% on March 17, 2026.
Faruqi & Faruqi, LLP is now reminding investors who purchased or acquired Microvast securities between April 1, 2025, and March 16, 2026, of the September 21, 2026, deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the company. The firm encourages investors who suffered losses during this period to contact partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310) to discuss their legal rights.
The firm's investigation alleges that Microvast and its executives made false and misleading statements, and failed to disclose critical information about inventory management issues and delays in commercial vehicle rollouts by the company's customers. These allegations have led to a significant decline in investor confidence and a potential legal challenge against the company.
Investors who purchased Microvast securities during the specified period are encouraged to review their trading records to determine if their purchases fall within the class action. Participation in the litigation does not require investors to take on any active role in the case. The firm has a track record of recovering hundreds of millions of dollars for investors since its founding in 1995.