Pomerantz Attorneys Appointed Lead Counsel in Desktop Metal Securities Litigation

On September 21, 2022, U.S. District Judge Indira Talwani, of the District of Massachusetts, appointed Pomerantz’s Brenda Szydlo and Dean P. Ferrogari, as Lead Counsel on behalf of Yichun Xie, the Lead Plaintiff, and the class, in Xie v. Desktop Metal, Inc., 22-cv-10297 (D. Mass.). This securities action alleges that Desktop Metal, Inc. ("Desktop Metal" or the "Company") misled the market regarding its failure to perform adequate due diligence into the manufacturing and product compliance practices of EnvisionTEC, Inc (“EnvisionTEC”) before it acquired EnvisionTEC.

Desktop Metal is a technology manufacturing company that designs and markets 3D printing systems. On February 16, 2021, the Company acquired EnvisionTEC and certain of its affiliates, which provide volume production photopolymer 3D printing solutions for end-use parts.

Allegations against Desktop Metal include that: (i) there were deficiencies in EnvisionTEC’s manufacturing and product compliance practices and procedures; and (ii) as a result of these deficiencies, there was a material risk to the commercialization of EnvisionTEC’s products.

During Q1 and Q2, 2021, Desktop Metal announced its financial results (which included EnvisionTEC’s finances), in which the Company boasted an increased revenue it attributed to the selling and shipping of more products and services.

The truth began to emerge on November 8, 2021, when Desktop Metal announced it was conducting an internal investigation as a result of a whistleblower complaint related to the manufacturing and product compliance practices and procedures regarding its photopolymer equipment and materials at EnvisionTEC’s facility. That same day, Desktop Metal announced that EnvisionTEC’s CEO, Ali El-Siblani, had resigned.

On this news, Desktop Metal’s share price fell $0.39 per share, or 4.24%, to close at $8.81 per share on November 9, 2021.

Then, on November 15, 2021, Desktop Metal announced it would notify the FDA of “compliance issues with certain shipments of EnvisionTEC’s Flexcera dental resins and its PCCA4000 curing box.”

On this news, the Company’s share price fell a further $1.19, or 14.84%, to close at $6.83 per share on November 16, 2021.