Kirby McInerney LLP Continues Investigation of Shareholder Claims Against Mercury Systems Inc. (MRCY)

The law firm of Kirby McInerney LLP is investigating potential claims against Mercury Systems Inc. (“Mercury” or the “Company”) (NASDAQ: MRCY). The investigation concerns whether Mercury and/or certain of its officers have violated the federal securities laws and/or engaged in other unlawful business practices.

Mercury provides commercially developed sensor processing subsystems.

On July 26, 2022, investment research firm Glasshouse Research initiated coverage of Mercury with a strong sell report entitled “Roll-Up Mercury Systems Set to Unravel,” concluding that Mercury’s management “has used accounting gimmicks to obfuscate true economic earnings while concealing the decay of its core company.” Glasshouse alleges, in part, that: (1) Mercury’s reported organic revenue is greatly overstated; (2) the acquisition of Physical Optics Corporation “has been a disaster;” (3) “[m]anagement has prematurely recognized revenue on significant projects boosting both revenue and earnings unsustainably;” (4) “[p]rogram delays and lack of critical parts have wreaked havoc on inventory, which will negatively impact margins going forward;” (5) the company “grossly overstated” its free cash flow “as the company has been stiffing its vendors to conserve cash;” and (6) skyrocketing unbilled receivables “suggest a pull-forward of $110 million of revenue.” On this news, the price of Mercury shares declined by $4.87 per share, or approximately 7.84%, from $62.13 per share to close at $57.26 on July 26, 2023.

On August 2, 2022, Mercury announced its fourth quarter and full year 2022 financial results, reporting $289.7 million in quarterly revenue, which is below prior guidance expecting revenue between $301.5 million and $321.5 million. The Company attributed the shortfall to material and order delays, in-quarter supply decommits, long lead times for high end semiconductors, and delayed supply in deliveries. On this news, the price of Mercury shares declined by $7.67 per share, or approximately 13.34%, from $57.48 per share to close at $49.81 on August 3, 2022.

On June 23, 2023, the Company announced a series of leadership and Board changes, including the initiation of a President and Chief Executive Officer transition, the appointment of a new independent director, and the identification of a second new independent director and a permanent Chief Financial Officer. On this news, the price of Mercury shares declined by $3.37 per share, or approximately 9.66%, from $34.87 per share to close at $31.50 on June 26, 2023.

If you purchased or otherwise acquired Mercury securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.

Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.

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