- Michigan-based Lineage Inc. is facing a class-action lawsuit alleging it misled investors in its IPO filings, concealing weakening financial trends following the pandemic-era cold storage boom.
- The suit, filed by the St. Clair Shores Police and Fire Retirement System, targets Lineage and underwriters including JPMorgan, Morgan Stanley, Wells Fargo, and BofA Securities.
- Lineage’s stock has plummeted from $78 at IPO to a mid-July low of $41, with the company posting significant losses shortly after going public.
A Record-Breaking Debut
Lineage Inc., based in Michigan, launched 2024’s largest IPO, raising $4.4B amid strong investor demand for cold storage, reports Bisnow. But just over a year later, the company faces mounting legal trouble. The St. Clair Shores Police and Fire Retirement System has filed a class-action lawsuit against Lineage and its underwriters. The suit alleges the company misled investors by presenting an overly optimistic view of its financial performance and growth prospects.
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The Allegations
The lawsuit, filed in US District Court for the Eastern District of Michigan, makes several key allegations. It claims Lineage failed to disclose that its strong financial results from FY 2021 to FY 2023 were largely driven by pandemic-related demand. Lineage’s operating income jumped 350% to $398M during that period, but the complaint alleges this growth was already fading by the second half of 2023. Instead of acknowledging the downturn, the company characterized weaker performance in early 2024 as a “return to normalized inventory levels.”
Post-IPO Performance
Soon after the IPO, cracks in Lineage’s financial story began to show. The company revealed an $80M net loss in the quarter preceding its IPO, followed by a $543M loss in Q3 2024—the same quarter it went public. By Q1 2025, revenue had declined 2.7% year-over-year to $1.3B. The lawsuit contends that Lineage’s customers had shifted to leaner inventory strategies, eroding demand for cold storage far more than the company disclosed to investors.
What Happens Next
Lineage’s stock has fallen sharply since its $78 IPO price, hitting a low of $41 by mid-July. US District Judge Denise Page Hood issued a summons on Monday, giving the company 21 days to respond. Separately, law firm Robbins Geller Rudman & Dowd LLP announced it is seeking additional plaintiffs and plans to file its own class-action suit by September 30.
Why It Matters
The Lineage case underscores the risk of investing in companies that rode temporary pandemic trends into public markets. It also highlights how REITs, especially in niche sectors like cold storage, must balance growth narratives with full disclosure. With investor appetite still strong for logistics-related assets, the outcome of this case could set a precedent for how similar companies approach transparency during IPOs.
