TWST:NASDAQ Class Action Lawsuit (Twist BioScience Corporation) was filed on December 12, 2022 on behalf of the shareholders.
On November 15, 2022, when Scorpion Capital (“Scorpion”) published a lengthy report (the “Scorpion Report”) alleging that Twist is “a cash-burning inferno that is not a going concern.”
Specifically, Scorpion alleged that, among other things, Twist’s purported DNA chip technology is a “farce” comparable to Theranos Inc.’s now infamous non-existent blood-testing technology, and that the Company’s growth and revenues are unsustainable, among other issues.
According to the Scorpion Report, Twist is perpetuating its fraud through false reporting of capital expenditures and gross margins—which Scorpion claims are actually negative.
Indeed, Scorpion’s investigation of the forthcoming Oregon Facility revealed no evidence that the Company is preparing to begin manufacturing there, suggesting that the Company is using the facility
to hide large operating expenses as fraudulent capital expenditures.
Scorpion further alleged that the Company’s growth is dependent upon unsustainable pricing strategies, such as using below-cost prices to undercut competitors by as much as 70% to 85%.
Ultimately, the Scorpion Report concluded that Twist is “operating a Ponzi-like scheme that will end in bankruptcy.”
In response to the revelations in the Scorpion Report, the price of Twist common stock fell $7.57 per share, or nearly 20%, from a close of $38.00 per share on November 14, 2022, to close at $30.43 per share on November 15, 2022.