By Reed R. Kathrein

The Power Plant on PowerPoint

Public markets operate on a rather elegant premise: capitalism allows you to be terrible at executing your business plan, as long as you do not lie about it. A company can incinerate cash, struggle to build products, and completely miss its operational targets. What it cannot do is stand in front of investors, look them in the eye, and declare that the assembly line is humming while the factory floor is metaphorically—or perhaps literally—on fire. Without private enforcement and the ever-present Fear Of Lawsuit (FOLS), corporate executives would have near-zero economic incentive to honor this boundary. The expected value of pretending everything is fine is simply too high. This brings us to Fluence Energy, Inc. (NASDAQ: FLNC), a provider of energy storage and optimization software and hardware that seemingly decided the best way to hit aggressive revenue projections was to imagine a world where its manufacturing supply chain actually functioned.

The Mechanics of the Mirage

The way this business model usually works is that a company sells massive battery systems, builds a massive backlog, and then relies on contract manufacturers to actually produce the hardware. At the end of fiscal 2025, Fluence projected a record-breaking $3.2 billion to $3.6 billion in revenue for 2026, leaning on an enormous purported backlog of $5.3 billion. The company assured the market it had adequate access to key components and was actively deploying advanced manufacturing technologies at its contract facilities to meet soaring demand. In the energy storage hardware business, however, a backlog is merely an accounting fiction if you cannot actually build and deliver the batteries.

But the operational reality was vastly different than the pitch, according to the complaint filed in Hatweek v. Fluence Energy, Inc., Case No. 1:26-cv-08475, Southern District of New York. The revenue underlying the company's aggressive 2026 guidance depended heavily on new contract manufacturing facilities that were not completed, not operational, and entirely incapable of producing at the necessary volumes. Furthermore, the corrective measures meant to fix production issues at existing contract manufacturers were simply not working. When the bill for this fiction came due across three disastrous quarters in 2026, the company was forced to repeatedly slash its guidance. Ultimately, Fluence admitted in September 2026 that ongoing delays at its Houston contract manufacturing facility meant its full-year adjusted EBITDA guide was dropping from a projected $10 million loss down to a staggering $200 million loss.

The Texts

Here is Fluence’s CFO, Ahmed Pasha, speaking to investors on February 4, 2026, right as the reality of their manufacturing bottlenecks was allegedly becoming clear:

A "clear line of sight on project costs" is a fascinating choice of words when the project in question involves a contract manufacturing facility that is allegedly not completed or operational. It is, of course, very easy to have a clear, unobstructed line of sight when there is no physical factory blocking your view. There is a timeless corporate mystery as to why executives, when faced with a catastrophic internal reality, feel compelled to document their extreme, numerical confidence in the public record. You cannot build grid-scale battery systems out of pure, unadulterated financial discipline.

But perhaps the most impressive display of "financial discipline" came from the people who owned the company. On May 6, 2026, Fluence reaffirmed its massive full-year guidance, reassuring the market that everything was on track. Nine days later, on May 15, 2026, the company's 10% institutional owners decided it was a fantastic time to head for the exits. AES Corp dumped 10,066,414 shares for $211,394,694. Siemens (via SPT Holding Sarl) dumped an identical 10,066,414 shares for $206,638,313. The Qatar Investment Authority sold 2,867,172 shares for $60,210,612. All told, the insiders cashed out nearly half a billion dollars at over $20 a share. You have to wonder what they knew when they looked at that "clear line of sight" down the unbuilt assembly line. By September, after two catastrophic guidance cuts, the stock had collapsed to $7.66.

The Enforcement Deficit

The SEC is perennially understaffed, underfunded, and drowning in a sea of corporate filings. They might get around to sending Fluence a politely worded subpoena in a few years, long after the executives have moved on and the shareholders have absorbed the catastrophic stock drops—which included a 34.63% plunge in February, a 7.17% slide in August, and a 15.36% drop in September. This is exactly why private enforcement and FOLS must serve as the market's primary mechanism for pricing correction. Corporate boards do not proactively self-correct because it is the right thing to do; they correct because private litigators show up and demand the receipts.

If You Bought the Float

If you happened to purchase $FLNC securities during the period when management claimed their unbuilt contract manufacturing facilities were fully equipped to deliver a massive revenue backlog, and you are interested in seeing the bill for that discrepancy, our litigation team at Hagens Berman is reviewing the paper trail.

• Case Hub: hbsslaw.com/FLNC
• Email: [email protected]