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Shoals Technologies Group, Inc.

Company NameShoals Technologies Group, Inc.
Stock SymbolSHLS

On August 1, 2023, Shoals disclosed that it had recorded a warranty liability of $9.3 million related to an issue involving “a subset of wire harnesses used in [Shoals’ electrical balance of system (“EBOS”)] solutions presenting excessive pull back of wire insulation at connection points,” which Shoals dubbed “shrinkback.”

Then, on November 7, 2023, Shoals revealed that it had taken an additional $50.2 million charge for warranty expense as a result of the shrinkback issue. The Company further stated that it expected the shrinkback issue to cost between $59.7 million and $184.9 million dollars to remedy.

On this news, Shoals’ stock price fell $3.28, or 20.2%, to close at $12.95 per share on November 9, 2023, thereby injuring investors.

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