Holley (US:HLLY) Globenewswire·2025-12-21 21:01Core Viewpoint - Holley Inc. (NYSE: HLLY) is facing a federal securities fraud class action lawsuit, with allegations that the company misled investors regarding its financial health and relationships with resellers and distributors [2][3]. Group 1: Allegations of Misleading Statements - The lawsuit claims that Holley Inc. made false or misleading statements about its direct-to-consumer (DTC) channel, which negatively impacted its relationships with resellers and distributors, crucial for the majority of its revenue [2]. - It is alleged that Holley's focus on the DTC channel led to significant damage to its relationships with resellers and distributors, resulting in decreased purchases and increased returns of products [2]. - The company reportedly used discounting strategies to grow its DTC channel, undermining its historical pricing discipline with resellers and distributors [2]. - The lawsuit asserts that Holley's DTC growth could not compensate for the negative financial impacts stemming from strained relationships with resellers and distributors [2]. - Holley is accused of failing to integrate and capture synergies from its acquisitions, leading to operational inefficiencies and inventory management issues [2]. - The complaint highlights that Holley benefited from temporary COVID-related stimulus funds, misleading investors into believing that the resulting growth was sustainable [2]. Group 2: Legal Proceedings - The court has determined that the complaint has sufficiently pleaded allegations of falsity and scienter, meeting the necessary legal standards to survive a motion to dismiss [3]. - The court found that the complaint adequately listed misleading statements made by company leadership and provided reasons for their falsity [3]. Group 3: Shareholder Actions - Current shareholders of Holley who have held shares since on or shortly after July 21, 2021, can seek corporate reforms and the return of funds to the company at no cost [4].