GrafTech International Ltd.

The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of Ohio on behalf of those who acquired GrafTech International Ltd. (“GrafTech” or the “Company”) (NYSE: EAF) securities during the period from February 8, 2019 through August 3, 2023, inclusive (the “Class Period”). Investors have until March 25, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

On September 16, 2022, GrafTech filed with the SEC a current report on Form 8-K. The current report revealed that GrafTech’s manufacturing facility in Monterrey, Mexico had been ordered to shut down by regulators following a pair of inspections by the State Attorney’s office for the Secretary of Environment and the Ministry of the Environment. In the wake of this revelation, multiple Mexican news outlets reported that the cessation order had been made in response to GrafTech’s excessive pollution of hazardous carcinogenic gasses and particulate matter into neighboring communities. On this news, the price of GrafTech common stock fell from $5.30 per share on September 16, 2022 to $4.61 per share on September 20, 2022, or approximately 13%, on above average trading volume.

Then, on February 3, 2023, GrafTech issued a press release disclosing the Company’s financial and operational results for the fourth quarter and full year ended December 31, 2022 (the “4Q22 Release”). Contrary to prior representations that GrafTech’s business performance would only be significantly impacted beyond the fourth quarter of 2022 if the Monterrey facility remained closed, the 4Q22 Release revealed that the temporary closure of the Monterrey facility would have a “significant” adverse impact on the Company’s business performance in first half of fiscal 2023. On this news, the price of GrafTech common stock fell from $6.59 per share on February 2, 2023 to $5.58 per share on February 3, 2023, a decline of approximately 15%, on above average trading volume.
 

Then, on April 28, 2023, GrafTech issued a press release disclosing the Company’s financial and operational results for the quarter ended March 31, 2023 (“1Q23 Release”). The 1Q23 Release disclosed that GrafTech sales declined 62% compared to the first quarter of 2022 due to the suspension of operations at GrafTech’s Monterrey facilities, causing GrafTech to report a net loss of more than $7 million, down significantly from reported net income of approximately $124 million in the prior year quarter. On this news, the price of GrafTech common stock fell from $4.73 per share on April 27, 2023 to $3.92 per share on May 2, 2023, a decline of approximately 17%, on above-average trading volume.

Then, on August 4, 2023, GrafTech issued a press release disclosing the Company’s financial and operational results for the quarter ended June 30, 2023 (“2Q23 Release”). The 2Q23 Release reported that sales declined 49% compared to the second quarter of 2022 as the Company continued to “recover” from the effects of the Monterrey facility shutdown in 2022. As a result of the substantial decline in net sales, the 2Q23 Release reported a net loss of $8 million compared to $115 million in net income the Company reported in the second quarter of 2022. On this news, the price of GrafTech common stock fell from $5.23 per share on August 3, 2023 to $4.05 per share on August 4, 2023, or nearly 23%, on above-average trading volume.

The GrafTech class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) GrafTech's manufacturing operations in Monterrey, Mexico had for decades chronically contaminated neighboring communities with harmful carcinogenic gasses and particulate matter; (ii) GrafTech had signed agreements with local authorities committing itself to improving the environmental performance of its Monterrey facility, but repeatedly failed to honor these commitments; (iii) GrafTech had been repeatedly warned over an approximately 30-year period regarding its wanton disregard for the environment and health and well-being of people near its operations in Monterrey, Mexico; (iv) GrafTech's operations in Monterrey, Mexico were not in compliance with applicable environmental laws and regulations; (v) GrafTech had failed to adequately remediate the environmental problems caused by the Monterrey facility following the 2019 administrative proceeding conducted by the Department of Sustainable Development of the State of Nuevo Len; (vi) the government of Apodaca had sought intervention from the State of Nuevo Len authorities to curtail and prevent the adverse environmental impacts and noncompliance with environmental laws and regulations caused by the Monterrey facility; (vii) GrafTech's purported cost leadership was achieved in substantial part by failing to implement appropriate and effective environmental safeguards at its manufacturing facility in Monterrey, Mexico; (viii) GrafTech's capital expenditures and/or related operational projects were woefully insufficient to adequately address the harm that GrafTech's operations in Monterrey, Mexico had inflicted on the environment and people within the neighboring communities; (ix) as a result of the above, GrafTech was acutely exposed to undisclosed material risks that GrafTech's manufacturing operations in Monterrey, Mexico would be severely disrupted by government action or enforcement; and (x) as a result of the above, GrafTech was acutely exposed to undisclosed material risks that its supplies of pin stock and graphite electrodes would be withdrawn and/or materially diminished, thereby materially harming GrafTech's business, operations, reputation, and financial results.