Class Action against Terran Orbital updated

Satellite manufacturer Terran Orbital, now owned by Lockheed Martin, is facing a Class Action brought by law firm Levi & Korsinsky (and others) and recently an amended complaint was filed in the Action. In essence, the complaint alleges that Terran Orbital Corp. made materially false and/or misleading statements and/or failed to disclose that:

(i) it would take much longer than defendants had represented to investors and analysts for Terran to convert its contracts with its customers (collectively, “Customer Contracts”) into revenue and free cash flow;
(ii) Terran did not have adequate liquidity to operate its business while waiting for the Customer Contracts to generate revenue and free cash flow;
(iii) Terran had concealed the true scope and severity of its dire financial situation; and
(iv) as a result of the foregoing, Terran’s public statements were materially false and misleading at all relevant times.

Lockheed Martin acquired Terran Orbital in October 2024, at — it is alleged — something of a knock-down price.

According to the lawsuit, Terran Orbital and four of its current and/or former senior officers and or/directors (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the conversion of customer contracts into revenue and free cash flow and ancillary issues from SEC filings and related material.

For instance, at the beginning of the Class Period, the CEO stated that the company had increased its order backlog to $2.6 billion in the first half of 2023. The CEO added that Terran Orbital now had 30 programs and over 370 satellites on contract. The company expected 80 percent of the backlog to get converted into revenue over the next two and a half years.

The Action explains that LMT had offered only $0.25 per share for buying all of the outstanding shares of Terran Orbital because the company had been suffering from severe liquidity issues and was on the brink of bankruptcy. It is worth noting that Lockheed Martin had earlier given a better offer to buy Terran Orbital but withdrew the buyout offer and gave a less appealing offer, citing Terran’s financial ill-health.

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