A shareholder rights law firm has launched an investigation into DNOW Inc. after the company’s stock price plunged 19 percent on Feb. 20, wiping out over $580 million in market value.
“We’re focused on whether DNOW management may have known about MRC’s ongoing, persistent ERP implementation problems that, as management acknowledged a few months later, presented obstacles to efficiency,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation.
The investigation centers on disclosures regarding an enterprise resource planning (ERP) system at MRC Global Inc., which DNOW acquired on Nov. 6, 2025. On a Nov. 5 earnings call, DNOW management described the system as “state-of-the-art” and characterized implementation issues as an “isolated one-time event.” However, in its Feb. 20 financial results, DNOW revealed that “persistent ERP challenges” had negatively impacted revenue and that the system was an “obstacle.”
The reversal in commentary has put DNOW’s prior statements under scrutiny. The company also delayed its full-year 2026 guidance, citing the ongoing ERP challenges. The 19 percent share price drop on Feb. 20 reflected the market's reaction to the news.
Hagens Berman is encouraging investors who suffered substantial losses and individuals with non-public information to contact the firm. The investigation raises questions about the transparency of DNOW's disclosures to investors leading up to and following the MRC Global acquisition.
The probe suggests potential legal risks for DNOW, which could face a class-action lawsuit. Investors will be watching for any filings or further statements from the company in response to the investigation.
This article is for informational purposes only and does not constitute investment advice.
