SHAREHOLDER ALERT: Robbins LLP Reminds Shareholders that Aterian, Inc. (ATER), Formerly Mohawk Group Holdings, Inc. (MWK), is Being Sued for Misleading Shareholders
SAN DIEGO & NEW YORK–(BUSINESS WIRE)–$ATER #ATER–Shareholder rights law firm Robbins LLP reminds investors that a purchaser of Aterian, Inc. (NASDAQ:ATER) (formerly known as Mohawk Group Holdings, Inc.) filed a class action complaint against the Company for violations of the Securities Exchange Act of 1934 between December 1, 2020 and May 3, 2021. Aterian purports to be a “technology-enabled consumer products platform that builds, acquires and partners with e-commerce brands.”
If you suffered a loss due to Aterian, Inc.’s misconduct, click here.
Aterian, Inc. (ATER) Made Misstatements Regarding its Business Prospects
According to the complaint, on December 1, 2020, the Company announced that it had acquired the assets of “leading e-commerce business brands Mueller, Purstream, Pohl and Schmitt, and Spiralizer.” This announcement and subsequent statements by Company executives touted the Company’s M&A strategy, and growth and earnings potential. On this news, the Company’s share price jumped 18% on December 2, 2020, to close at $8.12. Shares continued to rise, closing at $17.21 per share on December 31, 2020, and reaching nearly $49.00 per share in mid-February, likely due in part to Aterian’s February 2, 2021, acquisition of the assets of e-commerce company Healing Solutions, LLC. Again Aterian touted its M&A strategy and the value Healing Solutions would bring to the Company.
However, defendants misled investors by failing to disclose that: (i) the Company’s organic growth is plummeting; (ii) the Company’s recent, self-lauded acquisitions were overpayments for flawed assets from questionable sources; (iii) the Company’s purported artificial intelligence software is a flawed product that lacks customer interest; and (iv) it uses rebate programs and paid for artificial reviews to pump their product offerings.
On May 4, 2021, analyst Culper Research published a report entitled: “Aterian (ATER): Bought from Felons & Fraudsters, Sold to You.” The report noted that “the Company has ties to convicted criminals and is promoting what we believe is an overhyped ‘AI’ narrative and a string of garbage acquisitions to mask the failure of its already ill-conceived core business.” The report ripped the Company’s acquisitions, stating “[w]e believe that there are serious problems with Aterian’s claims to maintain strong organic growth and to drive M&A synergies: to us, neither of these appears to be the case … In our view, this suggests not only that Aterian is unable to growth EBITDA at acquired business, but that its core business is also failing to produce.” On this news, Aterian’s stock price fell from its May 3, 2021 close of $20.66 to a May 5, 2021 close of $15.72 per share, a two-day drop of approximately 24%.
If you purchased shares of Aterian, Inc. (ATER) between December 1, 2020 and May 3, 2021, you have until July 12, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
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