Officers and directors of liquefied natural gas exporter Venture Global Inc. are facing a shareholder derivative lawsuit after significant drops in the company’s stock price following its January initial public offering (IPO). The lawsuit, filed in Virginia federal court on Wednesday, accuses the company’s leadership of failing to disclose crucial business struggles prior to the IPO, which led to misleading statements and a sharp decline in share value.
The complaint, filed by investor Paul White, targets nine key individuals in the company, including CEO Michael Sabel, founder Robert Pender, and other senior officers and directors. It also names several of the company’s IPO underwriters—Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and BofA Securities Inc. White claims the company’s failure to properly account for these issues resulted in false and misleading statements in Venture Global’s Registration Statement filed ahead of its IPO.
Venture Global’s IPO, which priced shares at $25 each, saw its stock trading begin in late January. However, the company’s prospects and financial stability came into question following a February report in which TotalEnergies’ CEO rejected a long-term supply contract with the company. This news caused Venture Global’s stock to fall from $19.70 to under $17.50. The complaint further notes that Venture Global was already facing legal challenges from major clients such as BP and Shell due to delays in its supply contracts.
The lawsuit claims that the company’s Registration Statement neglected to disclose negative financial developments, including the significant underperformance of its Calcasieu Project, which faced production issues, and ballooning costs associated with its Plaquemines Project. These issues were allegedly not mentioned in the IPO filings, which misrepresented the company’s business outlook as “innovative and disruptive.” The suit argues that had these critical issues been disclosed, investors would have been informed of the substantial risks involved.
A second decline in share price occurred in March, when Venture Global’s stock fell from $14.20 to under $9.10 following the release of disappointing fourth-quarter and full-year results for fiscal 2024.
In addition to the shareholder derivative lawsuit, Venture Global is facing a proposed securities class action regarding its post-IPO performance.
The complaint includes accusations that Venture Global’s leadership and IPO underwriters shared $70 million in fees for the offering without fully disclosing material risks that negatively impacted the company’s stock price and investor confidence.
The case, Paul White v. Michael Sabel et al., is being heard in the U.S. District Court for the Eastern District of Virginia under case number 1:25-cv-00792. White is represented by Thomas J. McKenna and Gregory M. Egleston of Gainey McKenna & Egleston, and Charles L. Williams of Williams & Skilling PC.
As of now, representatives for the defendants have not commented on the lawsuit.
