Pomerantz Law Firm Announces the Filing of a Class Action Against Babcock & Wilcox Enterprises, Inc. and Certain Officers - BW

NEW YORK, May 7, 2026 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Babcock & Wilcox Enterprises, Inc. ("B&W" or the "Company") (NYSE: BW) and certain officers.   The class action, filed in the United States District Court for the Northern District of Ohio, and docketed under 26-cv-00886, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired B&W securities between November 5, 2025 and March 11, 2026, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.

If you are an investor who purchased or otherwise acquired B&W securities during the Class Period, you have until June 15, 2026, to ask the Court to appoint you as Lead Plaintiff for the class.  A copy of the Complaint can be obtained at www.pomerantzlaw.com.  To discuss this action, contact Danielle Peyton at [email protected] or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.  

[Click here for information about joining the class action]

B&W, together with its subsidiaries, provides energy and emissions control solutions to industrial, electrical utility, municipal, and other customers in the United States ("U.S."), Canada, the United Kingdom, Indonesia, and the Philippines. 

B&W's largest shareholder is BRC Group Holdings, Inc. ("BRC"), formerly B. Riley Financial, Inc.  BRC's Co-Chief Operating Officer ("CEO") and Chairman of its Board of Directors is Bryant R. Riley ("Riley"). 

On November 4, 2025, B&W announced its entry into an agreement for a limited notice to proceed—that is, a preliminary agreement that envisioned a more definitive agreement in the coming months—for a project to deliver power (the "Power Generation LNTP") for an artificial intelligence factory owned and operated by Applied Digital Corporation ("Applied Digital").  Defendants repeatedly touted the purported value of the Power Generation LNTP "at over $1.5 billion".  Defendants did not disclose any involvement on the part of the Company's largest shareholder, BRC. 

Also on November 4, 2025, B&W issued a press release reporting its financial results for the fiscal quarter ended September 30, 2025 (the "Q3 Earnings Release"), in which Defendant Kenneth M. Young, B&W's Chairman and CEO touted the Power Generation LNTP's purportedly "profound" impact on the Company's "pipeline" and claimed that the eventual contract pursuant to the Power Generation LNTP "would serve as upside" to the Company's projected financial performance in the fiscal year 2026. 

That same day, B&W entered into a sales agreement with BRC and Lake Street Capital Markets, LLC in connection with the offering of up to $200 million of the Company's common stock (the "ATM Offering"), raising additional capital following the announcement of the Power Generation LNTP.  

On November 5, 2025, Defendants filed a prospectus on Form 424B5 with the U.S. Securities and Exchange Commission ("SEC") in connection with the ATM Offering. 

On November 7, 2025, Defendants issued a press release announcing that they had raised $67.5 million through the ATM Offering, "including approximately $50 million from a single fundamental global institutional investor".  In this press release, Defendants explicitly connected the ATM Offering to the Power Generation LNTP, stating that the ATM Offering "closely follows" the Power Generation LNTP.  Defendants also announced that they were pausing the ATM Offering, before reversing course less than one week later.   

The market responded favorably to these updates, as B&W's stock price rose over 198% from $3.74 on November 4, 2025, the last trading session before the Company announced the Power Generation LNTP and issued the Q3 Earnings Release, to $11.15, on February 3, 2026.   

BRC acted quickly to take advantage of B&W's inflated stock price.  On February 11, 2026, BRC, related entities BRF Investments, LLC and B. Riley Securities, Inc., and Riley, BRC Co-CEO and Chairman, filed a statement of changes in beneficial ownership on Form 4 with the SEC, disclosing that BRC sold its entire directly-held position in B&W common stock valued at approximately $10.4 million.  BRC executed this sale at a stock price of $9,which was 140% greater than B&W's closing stock price on November 4, 2025, the last trading session before the Company announced the Power Generation LNTP and issued the Q3 Earnings Release. 

On March 4, 2026, B&W issued a press release announcing it had "received full notice to proceed on a $2.4 billion design-build agreement with Base Electron, an independent power producer backed by Applied Digital . . . to deliver project 1.2 gigawatts (GW) of new generation capacity" (the "Power Generation Contract").   

The market responded favorably to this news, as well.  B&W's stock price rose $3.70, or 45%, to close at $11.80 on March 4, 2026. 

Defendants repeatedly touted the purported value of the Power Generation Contract as evidence that B&W's backlog was robust, and that demand for B&W's products and services was strong.  However, Defendants did not disclose that if Base Electron defaulted on its obligations under the purportedly $2.4 billion agreement, Applied Digital could unilaterally terminate its guarantee of Base Electron's obligations under the agreement for as little as $50 million.  

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) B&W's largest shareholder, BRC, stood on both sides of the Power Generation Contract and had close ties to B&W's counterparty; (ii) Applied Digital did not need the products and services that B&W would purportedly supply pursuant to the Power Generation LNTP and Contract; (iii) the foregoing, at the very least, would raise questions about the parties' actual intent behind entering into the Power Generation LNTP and Contract, including whether the Company is likely to recognize revenues from these agreements; (iv) accordingly, the business and financial prospects of the Company were overstated; and (v) as a result, Defendants' public statements were materially false and misleading at all relevant times. 

The truth began to emerge on March 12, 2026, when Wolfpack Research ("Wolfpack") published a short report alleging that B&W had failed to disclose the close relationship between its largest shareholder, BRC, and Base Electron, B&W's counterparty to the Power Generation Contract:  Base Electron's directors included BRC Co-CEO and Chairman Riley, and Base Electron's registered address matched that of BRC's headquarters, not Applied Digital's.  Moreover, Wolfpack alleged that Applied Digital did not need the products and services that B&W would purportedly provide pursuant to the Power Generation Contract, and that "the ultimate purpose of this deal may be to provide exit liquidity for [BRC]".  Taken together, the Wolfpack report's contentions called into question whether B&W was likely to recognize revenues from the Power Generation Contract. 

Following publication of the Wolfpack report, B&W's stock price fell $1.71 per share, or 11.59%, to close at $13.05 per share on March 12, 2026. 

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com. 

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 CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

SOURCE Pomerantz LLP