Pomerantz LLP announces that a class action lawsuit has been filed against Terran Orbital Corporation (“Terran” or the “Company”) (NYSE: LLAP) and certain officers. The class action, filed in the United States District Court for the Southern District Of Florida, and docketed under 24-cv-81191 is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Terran securities between August 15, 2023 and August 14, 2024, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired Terran securities during the Class Period, you have until November 26, 2024 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Terran manufactures and sells satellites for aerospace and defense industries in the United States (“U.S.”) and internationally. Historically, Lockheed Martin Corporation (“Lockheed”) has been one of Terran’s most significant stakeholders and customers. As of October 31, 2022, Lockheed owned approximately 9.5% of Terran’s stock, and by May 2, 2024, Lockheed owned an approximate 28.3% stake in the Company. Likewise, as of December 21, 2021, contracts with Lockheed represented approximately 50% of Terran’s consolidated revenues, whereas Lockheed comprised approximately 70% of Terran’s consolidated revenues during the three months ended June 30, 2024.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) it would take much longer than Defendants had represented to investors and analysts for Terran to convert its contracts with its customers (collectively, “Customer Contracts”) into revenue and free cash flow; (ii) Terran did not have adequate liquidity to operate its business while waiting for the Customer Contracts to generate revenue and free cash flow; (iii) Terran had concealed the true scope and severity of its dire financial situation; and (iv) as a result of the foregoing, Terran’s public statements were materially false and misleading at all relevant times.
In February 2023, Terran issued a press release announcing that its wholly owned subsidiary Tyvak Nano-Satellite Systems, Inc. had been awarded a $2.4 billion contract from Rivada Space Networks GmbH (“Rivada”) to produce a total of 300 satellites for Rivada (the “Rivada Contract”). Throughout the Class Period, Defendants repeatedly represented to investors and analysts that Terran would rapidly convert the Rivada Contract and other Customer Contracts into revenue and free cash flow, and that Terran had ample liquidity to operate its business while waiting to generate revenue and free cash flow from the Customer Contracts.
On March 1, 2024, Lockheed made a non-binding offer to acquire all of Terran’s outstanding common stock for $1.00 per share in cash (the “Initial Buyout Offer”).
On May 2, 2024, Lockheed disclosed in a filing with the U.S. Securities and Exchange Commission (“SEC”) that, “[o]n April 30, 2024, [it] notified [Terran] that it was withdrawing the [Initial Buyout Offer].”
On this news, Terran’s stock price fell $0.22 per share, or 17.05%, to close at $1.07 per share on May 3, 2024.
On August 12, 2024, Terran filed its quarterly report for the second quarter of 2024 with the SEC, revealing, inter alia, that the Company had only $14.6 million in cash and debt of approximately $300 million as of June 30, 2024, as well as that it had removed the Rivada Contract from its backlog, thereby reducing the Company’s total backlog by over 88% from $2.7 billion to a mere $312.7 million as of June 30, 2024.
On this news, Terran’s stock price fell $0.06 per share, or 8.45%, to close at $0.65 per share on August 12, 2024.
Then, on August 15, 2024, Terran and Lockheed issued a joint press release announcing that they had entered into a definitive agreement whereby Lockheed would acquire Terran for $0.25 per share in cash (“Transaction”). The sale price was well below the (i) $0.40 per share price at which the Company’s stock had closed the day prior, and (ii) the $1.00 per share price that Lockheed had offered in its Initial Buyout Offer.
On this news, Terran’s stock price fell $0.157 per share, or 39.25%, to close at $0.243 per share on August 15, 2024.
On September 9, 2024, Terran filed a preliminary proxy (“Proxy”) with the SEC in connection with the Transaction. The Proxy revealed that the reason Lockheed had withdrawn the Initial Buyout Offer, and was only willing to offer $0.25 per share in cash to acquire Terran, was because Terran had long suffered from severe liquidity challenges and was on the verge of bankruptcy. The Transaction announced on August 15, 2024, thus represented a materialization of the risks posed by Terran’s severe liquidity challenges that Defendants had deliberately concealed from Terran stockholders throughout the Class Period.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.
