Four American law firms have announced that they will be investigating 3D Systems‘ decision to defer filing its audited statements after the share price dropped nearly 20% on March 2, 2021. The investigations, which are being conducted by Kessler Topaz Meltzer & Check, LLP, Glancy Prongay & Murray LLP, Howard G. Smith and Frank R. Cruz, all allege that shareholders were damaged by the company’s intentional manipulation of its stock price.
The allegations come after 3D Systems deferred filing its annual report on March 2. The company instead declared that it was filing for an extension with the Securities and Exchange Commission.
Each law office makes the non-specific allegation that the Company committed ‘possible violations of federal securities laws’. They are seeking more information from shareholders and from company insiders to ground their claims. The firms claim that 3D Systems’ deferred filing coupled with the release of its unaudited financial reports was timed to reduce share price. Manipulating the market in this manner is prohibited by the Securities Exchange Act of 1934.
Investors have been on a wild ride in the opening months of 2021. 3D Systems opened 2021 trading at approximately $10.50 a share; its price quintupled to $56.50 a share on February 9 before retreating to its current value at roughly $25.50.
March 2’s market activity saw a spike in trading volume as shareholders sold stock off on the news of a deferred filing. 3D Systems’ stock price fell $7.62 per share, or 19.64%, to close at $31.17 per share on March 2, 2021. 8,014,845 shares were traded that day; 3,756,507 shares changed hands the day before. The stock has continued to experience large sell-offs of approximately eight million shares a day in the three following trading sessions. The company has a little of 124 million shares out.
The firms’ allegations have as yet to be substantiated; they are currently collecting information to make the claims stick. The company has yet to respond to these firms’ call for action.