Redwire Space (NYSE:RDW), a partner in Blue Origin’s proposed orbiting space station, is the target of a class-action lawsuit alleging federal securities fraud, according to court documents.
The lawsuit against the Florida-based company accuses Redwire of delaying release of its third quarter earnings in November 2021, which resulted in a 16 percent drop in its stock price “on unusually heavy trading volume,” court documents said.
The stock price fell an additional 8.3 percent after Redwire announced it was not “able to finalize its financial statements or its assessment of the effectiveness of its disclosure controls and procedures,” according to the documents.
Redwire CEO Peter Cannito and CFO William Read are named as defendants in the case.
“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,” according to the court documents. The lawsuit was filed December 17 in U.S. District Court Middle District of Florida.
Redwire has not yet responded to FLYING’s requests for comment.
Redwire’s Role in Space Station
Redwire has joined billionaire Jeff Bezos’ Blue Origin to perform several roles in the Orbital Reef commercial space station project, including microgravity research, payload development, operations, large deployable structures, and creation of Orbital Reef’s digital twin.
In December, NASA announced it had chosen Blue Origin to develop the project as a successor to the International Space Station, which is nearing the end of its life cycle. Boeing, Genesis Engineering Solutions, and Arizona State University are also partners in Orbital Reef.
It’s unclear whether the suit threatens Redwire’s participation in the orbiting outpost.
Redwire also partnered with NASA for its Double Asteroid Redirection Test (DART), an experimental rocket launch to change the path of a nearby asteroid.
The suit was filed by Jed Lemen on behalf of “persons and entities that purchased or otherwise acquired Redwire securities between August 11, 2021, and November 14, 2021.”
SPAC Merger
In September, Redwire became the latest space-focused company to begin publicly trading after it completed a SPAC merger with special purpose acquisition company Genesis Park Acquisition Corp.
The deal valued Redwire at $675 million, with the company expected to receive an estimated $170 million in cash.
