The Rosen Law Firm, a global investor rights practice, announced on April 1 that it is investigating potential securities claims against DNOW Inc. (NYSE: DNOW) on behalf of its shareholders.
The investigation stems from "allegations that DNOW Inc. may have issued materially misleading business information to the investing public," the law firm said in a statement. The firm is encouraging investors who have suffered losses in the company's stock to come forward.
This action could be a precursor to a class-action lawsuit, which would expose DNOW to significant legal and financial risk. The Rosen Law Firm has a track record in this area, having recently filed a suit against Driven Brands Holdings Inc. (NASDAQ: DRVN) for allegedly making false statements and failing to disclose its true financial condition. In that case, the firm alleged that unreconciled cash balances led to overstated revenue and understated expenses.
For investors, the announcement introduces a period of uncertainty that could put downward pressure on DNOW's stock price. The threat of litigation often leads to share price volatility as the market digests the potential for financial penalties and reputational damage.
The Rosen Law Firm is a prominent player in securities litigation, having been ranked number one by ISS Securities Class Action Services for the number of settlements in 2017 and securing over $438 million for investors in 2019 alone.
The investigation into DNOW creates a new overhang for the stock, which supplies equipment and services to the energy sector. Shareholders will now be watching for a formal lawsuit filing and the company's subsequent response to the allegations.
This article is for informational purposes only and does not constitute investment advice.
