Key Takeaways:
A securities class action has been filed against GPGI Inc., the rebranded entity formerly known as CompoSecure, alleging the company misled investors about the value of its $1.6 billion acquisition of Husky Technologies Ltd., wiping out nearly half the stock's value.
"Defendants had materially overstated the value of Husky and the acquisition was primarily motivated by generating millions of dollars in fees for Resolute Holdings rather than creating long-term value for CompoSecure shareholders," the complaint alleges, according to a statement from Robbins LLP.
The lawsuit covers investors who bought GPGI Class A common stock between Nov. 3, 2025, and May 6, 2026. On Nov. 3, 2025, CompoSecure announced it would acquire Husky, a manufacturer of plastic injection molding equipment. The deal closed Jan. 12, 2026, and the company rebranded as GPGI.
On Feb. 26, 2026, short seller Jehoshaphat Research published a report claiming GPGI had overstated Husky's value to secure shareholder approval. GPGI's stock fell from $23.12 to $12.94 by May 7, a 44% decline. On March 12, GPGI reported Husky had $520.8 million in fourth-quarter net sales, up 6.1% year over year, but Pro Forma Adjusted EBITDA margins contracted 318 basis points to 26.1%. The stock dropped 16% over two trading sessions following that disclosure.
The complaint alleges Husky was not on track to achieve the revenue and Adjusted EBITDA targets provided in the proxy statement and that those targets lacked a reasonable basis in objective fact. Multiple law firms, including Robbins LLP, Gainey McKenna & Egleston, and Rosen Law Firm, have announced investigations or filed actions on behalf of shareholders.
Investors have until Sept. 15, 2026, to file lead plaintiff motions. The case is pending in the U.S. District Court for the Southern District of New York.
The 44% decline puts GPGI shares at their lowest since the Husky acquisition closed, testing investor confidence in the combined company's strategy. The lead plaintiff deadline in September will determine whether the case proceeds as a consolidated action.
This article is for informational purposes only and does not constitute investment advice.
