The Red Flags: What Insiders Allegedly Knew Before Shareholders Did

NEW YORK , April 16, 2026 /PRNewswire/ -- SueWallSt announces that a securities class action has been filed against Power Solutions International, Inc. (NASDAQ: PSIX).

YOU MAY BE AFFECTED IF YOU:

• Purchased PSIX stock between May 8, 2025 and March 2, 2026
• Lost money on your Power Solutions investment

Find out if you qualify to recover losses or contact Joseph E. Levi, Esq. at jlevi@SueWallSt.com or call (888) SueWallSt.

Power Solutions shares fell $24.84 per share, or 28.97%, to close at $60.91 on March 3, 2026, after the Company disclosed that gross margins had collapsed 8% year-over-year due to problems management had characterized as merely "temporary" for three consecutive quarters.

What They Allegedly Knew

The securities action alleges that while management publicly described manufacturing challenges as short-lived growing pains, internal operations told a different story. Gross margins deteriorated every single quarter of 2025: from 29.7% in Q1, to 28.2% in Q2, to 23.9% in Q3, and finally to 21.9% in Q4. As claimed in the action, this was not a temporary disruption but a deepening structural problem that executives had visibility into well before shareholders.

The Red Flags That Emerged

The complaint identifies a pattern of escalating warning signs that were allegedly minimized or concealed:

• Q1 2025 (May 8): Management touted "higher growth, higher-margin markets" and 29.7% gross margin while announcing accelerated data center production capacity expansion
• Q2 2025 (August 7): Gross margin fell 360 basis points to 28.2%, yet the decline was attributed to "temporary inefficiencies" from the ramp-up
• September 5, 2025: An investor presentation continued to tout "margin expansion opportunities" even as margins had already begun their decline
• Q3 2025 (November 6): Gross margin dropped another 430 basis points to 23.9%, and the 2025 sales growth outlook was quietly cut to 45%, far below the 74% and 65% quarterly growth rates previously reported
• Q4 2025 (March 2, 2026): Gross margin fell to 21.9%, the Company disclosed it was only now "executing specific actions to improve supply chain performance," and the 2026 outlook offered only "moderate margin improvement"

As pleaded in the complaint, the gap between the optimistic public narrative and the accelerating margin erosion widened with each passing quarter.

Inside Knowledge vs. Public Statements

The action contends that the individual defendants possessed the power and authority to control the Company's SEC filings, press releases, and investor presentations. They were allegedly provided with these materials before issuance and had the ability to prevent misleading information from reaching the public. According to the lawsuit, they knew that concealed adverse facts had not been disclosed to shareholders and that the Company's positive statements lacked a reasonable basis.

"The timeline raises important questions about when certain risks were known internally versus when they were disclosed to the investing public. Three consecutive quarters of margin compression, each described as temporary, demands scrutiny." -- Joseph E. Levi, Esq.

Submit your information to recover losses or call (212) 363-7500.

ABOUT THE FIRM -- Levi & Korsinsky represents investors in securities class actions nationwide, with a track record of recovering hundreds of millions for shareholders harmed by alleged corporate concealment. Ranked among ISS Top 50 for seven consecutive years. Applications to serve as lead plaintiff must be filed by May 19, 2026.

CONTACT:
SueWallSt
Joseph E. Levi, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
jlevi@SueWallSt.com
Tel: (888) SueWallSt
Fax: (212) 363-7171

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SOURCE SueWallSt.com