Bragar Eagel & Squire, P.C. Litigation Partner Brandon Walker Encourages Investors Who Suffered Losses In Shoals (SHLS) To Contact Him Directly To Discuss Their Options

If you are a long-term stockholder in Shoals between May 17, 2022 and November 7, 2023 and would like to discuss your legal rights, call Bragar Eagel & Squire partner Brandon Walker or Marion Passmore directly at (212) 355-4648.

NEW YORK, Aug. 14, 2025 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Shoals Technologies Group, Inc. (NASDAQ: SHLS) on behalf of long-term stockholders following a class action complaint that was filed against Shoals on May 21, 2024 with a Class Period from May 17, 2022 and November 7, 2023. Our investigation concerns whether the board of directors of Shoals have breached their fiduciary duties to the company.

According to the filed complaint, throughout the Class Period, Defendants touted the Company’s “focus on quality and reliability” with regard to its EBOS components, from which Shoals generated the majority of its revenue during the Class Period. These components were backed by a product warranty Shoals provided to its customers. Shoals highlighted that its products “meet [the Company’s] stringent quality requirements.” As the Company’s warranty supported the products meeting “stringent quality requirements,” Shoals assured investors throughout the Class Period that its reported “Cost of Revenue” included costs related to product warranty liability. 

In Shoals’ Quarterly Report on Form 10-Q for the first quarter of 2023, filed with the SEC on May 8, 2023 (the “1Q23 10-Q”), investors were first informed of a potential issue involving “a subset of wire harnesses used in [Shoals’] EBOS solutions [] presenting excessive pull back of wire insulation at connection points,” which Shoals dubbed “shrinkback.” Shoals also sought to ease investors’ concerns by reporting that it had “substantially ceased use of the related wire.” 

Then, on August 1, 2023, Shoals filed its Quarterly Report on Form 10-Q for the second quarter of 2023 (“2Q23 10-Q”) with the SEC and held a conference call with analysts to discuss its results for the quarter. The 2Q23 10-Q disclosed that Shoals had recorded a warranty liability of $9.3 million related to the shrinkback issue. During the corresponding call with analysts, Oppenheimer analyst Colin Rusch asked Defendants to “talk a little bit about the wire issues . . . how extensive it was in terms of the number of customers and number of shipments and how much time it was spread over?” In response, Chief Financial Officer (“CFO”) Dominic Bardos stated, “We’ve communicated pretty much everything we can.” CFO Bardos also confirmed that “[t]he charge that we booked in the quarter we believe is adequate to do the remediation required, and that’s why we booked it.” 

The filed complaint further alleges that, in reality, and as remained undisclosed to investors, Shoals learned of customers experiencing wire insulation shrinkback by no later than March 2022. For example, in March 2022, Shoals learned of exposed copper conduit resulting from shrinkback in EBOS wire harnesses at a customer’s solar field in Arizona. Indeed, throughout 2022, Shoals learned of numerous customers experiencing similar copper conduit exposure, or shrinkback. As investors belatedly found out, Shoals had installed defective wire harnesses in at least 300 solar fields. These harnesses represented approximately 30% of the total amount of Shoals harnesses manufactured between 2020 and 2022. As a result, Defendants’ positive statements about the Company’s financial guidance, business, operations, and prospects during the Class Period were materially false and/or misleading. 

On November 7, 2023, Shoals stunned the market by revealing that the Company had been forced to take an additional $50.2 million charge for warranty expense as result of the wire shrinkback issue. Shoals further advised that it expected the wire shrinkback issue to cost between $59.7 million and $184.9 million dollars to remedy. 

On this news, Shoals’ stock price fell more than 20%, from a closing price of $16.23 per share on November 7, 2023, to a closing price of $12.95 per share on November 9, 2023, wiping out approximately $550 million in market capitalization. 

Securities analysts were shocked by the disclosure and linked Shoals’ sharp stock price decline to the warranty charge. For example, in a report dated November 10, 2023, analysts at Barclays declared that “the upper end of the $60-$185mm came as surprise to investors and has contributed to the underperformance of the stock.” Similarly, analysts at Truist noted that the third-quarter results “were heavily impacted by a ~$50mm warranty charge that drove unadjusted 3Q [gross margins] well below our/street estimates.”

If you are a long-term stockholder of Shoals, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.

About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, South Carolina, and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

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Contact Information:

Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com