With the stock market dropping 3,500 points last week, panicked over the latest coronavirus scare, COVID-19, public companies should expect plaintiff class action securities lawyers to pounce on any material misstatements or omissions made in their press releases and public disclosures, including misstatements about supply chain difficulties.
According to Thomas Insights, 60% of U.S. manufacturers have been impacted by COVID-19 in their production facilities and supply chains, with 46% of suppliers reporting that their shipping and logistics have been disrupted, 35% reporting incidents of offshore factory suspension and production restrictions, and 8% reporting that the outbreak has caused the costs of goods to surge. Given these difficulties and a declining market, company executives may feel compelled to quell investor panic about their supply chain difficulties.
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