GLNG: Investors sue New Fortress Energy alleging violation of securities laws

A class action lawsuit has been filed by investors against US firm New Fortress Energy (NFE) accusing the company of misrepresenting facts concerning its Fast LNG projects located offshore Altamira, Mexico.

In its filing made September 17 in a US District Court of New York, the US LNG producer has been accused by the plaintiffs of concealing facts and “sharing overwhelming positive statements”, leading investors to purchase the company’s stock “at artificially inflated prices”.

In particular, the lawsuit claims that the New York-headquartered company neglected to disclose that the project would not achieve its publicly stated progress, more precisely that the FLNG 1 would be operating by March 2024. NFE shipped its first LNG cargo from FLNG 1 on August 9.

The filing goes on to accuse the company of continuing to misrepresent the pace at which the projects were being built even after revealing the cost of delays encountered.

In its second quarter earnings call on August 9, NFE disclosed an adjusted EBITDA of $120mn, far below the previous projection of $275mn. The company also reported a $80.75mn net loss in the quarter, despite analysts forecasting the firm would report modest profits.

Meanwhile, guidance for the rest of 2024 was also lowered as disappointing results were attached to setbacks in the start-up of its FLNG 1 project. NFE stated that the delays cost the firm to experience lost operating margins of $150mn per quarter.

Following its struggling earning report, NFE’s spare price dropped by $4, falling to $13, representing a freefall of over 23% on the Nasdaq. Since August, the company’s share price has continued to slip and sat at $9.81 as of November 12.

Investors that purchased the company’s stock between February 29, 2024 and August 8, 2024 have until November 18 to apply to the court.

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