View Inc. reached an $11 million settlement with investors following a multi-year class action lawsuit that accused the smart glass manufacturer of federal securities law violations after the company’s move to go public in 2021.
The judge had previously dismissed the lawsuit in early 2024, but allowed the lead plaintiff, Stadium Capital LLC, to file a third amended complaint in June 2024. After several months of back-and-forth negotiations, all parties agreed to resolve the case in early 2025 for $11 million, ending a nearly four-year-long lawsuit.
According to court documents, the $11 million settlement represents 16.3% to 32.8% of the estimated recoverable damages in the case. That exceeds the median 7.5% recovery in cases “alleging claims under the Exchange Act between 2015 and 2024 and exceeds the median settlement amount of $10 million in the Ninth Circuit.”
Court documents state that the settlement includes all individuals who purchased or acquired View stock between Nov. 20, 2020, and May 10, 2022. The settlement also notes that while Stadium Capital and its counsel believe the suit’s claims have merit, they recognize the expense and risk of continued litigation.
Prior to the settlement, Stadium Capital officials argued that View made material misrepresentations to investors in, among other filings with the United States Securities and Exchange Commission, its Dec. 23, 2020, de-special purpose acquisition company (SPAC) registration statement. The statement included two amendments concerning a materially misstated and understated warranty accrual related to View’s “smart panels.”
Court documents stated that on Aug. 16, 2021, View announced it had begun an independent investigation concerning the “adequacy of the company’s previously disclosed warranty accrual.” Due to this news, View’s share price fell $1.26, or over 24%, to close at $3.92 per share on Aug. 17, 2021, on unusually heavy trading volume.
Stadium Capital officials argued that View’s trading prices declined as the market absorbed the company’s revelations regarding inaccuracies in its financial statements for 2019 and 2020, specifically concerning liabilities associated with warranties. They alleged that View and others had suffered significant losses and damages due to its wrongful acts and omissions and the decline in the market value of its securities.
Subsequent announcements regarding the repercussions of the company’s findings on its financial condition continued to impact trading prices.
However, U.S. District Judge Beth Labson Freeman stated in her April 2024 order dismissing the case that Stadium Capital couldn’t “attribute its losses to the August 2021 announcement — and thus fails to allege loss causation — because Stadium Capital sold its stock before the truth of the underlying falsehood was revealed. Put differently, because Stadium Capital sold its shares before the truth was revealed, the alleged misrepresentations did not injure Stadium Capital.”
In April 2024, former CEO Rao Mulpuri announced an agreement with a consortium of investors aiming to take View private while revealing plans to proceed with a prepackaged Chapter 11 bankruptcy process.
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