NET Power Faces Investor Backlash as Class Action Deadline Looms

Investors in NET Power Inc. (NYSE: NPWR) are grappling with mounting legal and financial pressures as a federal securities class action lawsuit advances, with a critical deadline for lead plaintiff applications set for June 17, 2025. The case, spearheaded by law firm Faruqi & Faruqi, alleges that the company misled the public about the timeline and costs of its flagship Project Permian, a carbon-capture power plant, ultimately triggering significant stock declines and financial strain.

The Case Against NET Power: A Timeline of Broken Promises

Project Permian, designed to demonstrate NET Power’s all-gas, zero-emission power generation technology, has become a symbol of both ambition and mismanagement. The lawsuit contends that executives misled investors by downplaying delays and cost overruns caused by supply chain bottlenecks and operational challenges in West Texas. Key milestones include:
- June 9, 2023: The company first announced Project Permian, projecting completion by 2026 at a cost of $1.1 billion.
- November 14, 2023: A revised timeline pushed completion to late 2027 or early 2028, with no cost updates. This disclosure caused shares to plummet 18.54%.
- March 10, 2025: A further delay to “no earlier than 2029” and a cost escalation to $1.7–2.0 billion sent the stock down 31.46% in a single day.

The final blow came in April 2025, when the departure of the COO and CFO triggered another 5.75% decline. By April 16, NPWR shares had slumped to $2.13, down nearly 80% from their 2023 highs.

Financial Fallout and Legal Risks

The lawsuit underscores how these missteps have eroded investor confidence and corporate health. By the end of 2024, NET Power’s cash reserves had dwindled to $533 million from $580 million, reflecting operational and capital outflows. With Project Permian’s costs now exceeding $1.7 billion, the company faces a liquidity crunch.

Faruqi & Faruqi’s case hinges on proving that executives made “materially false and misleading statements” about the project’s viability. If successful, eligible investors (those who purchased shares between June 9, 2023, and March 7, 2025, with losses over $50,000) could recover losses. However, the June 17 deadline for lead plaintiff applications is a critical hurdle, as only qualified investors may represent the class.

A Look Ahead: Implications for Investors

The outcome of this lawsuit could reshape NPWR’s trajectory. Even if the company survives litigation, its reputation as a pioneer in clean energy innovation has been tarnished. Meanwhile, the exodus of senior leadership and the project’s ballooning costs raise questions about governance and execution.

For shareholders, the stakes are clear:
- Litigation Risk: The case, if proven, could force NPWR to pay substantial damages.
- Project Viability: A delayed, over-budget Project Permian may struggle to secure further funding or partnerships.
- Market Perception: The stock’s collapse reflects investor skepticism about the company’s ability to deliver on its promises.

Conclusion: A Crossroads for NET Power

The June 17 deadline marks a pivotal moment for NPWR investors. With over $500 million in losses cited by the lawsuit and a stock price that has lost 80% of its value since 2023, the company’s future hinges on transparency and accountability.

Data paints a stark picture:
- NPWR’s market cap has shrunk from $2.4 billion in 2023 to under $500 million by April 2025.
- The firm’s cash reserves have fallen by $47 million in a year, even as costs for Project Permian nearly double.
- Faruqi & Faruqi’s success in recovering over $700 million for investors since 1995 suggests plaintiffs may have a strong case.

For now, investors must decide whether to press claims, wait for Project Permian’s uncertain revival, or exit entirely. The legal battle ahead will test both the company’s resilience and the market’s patience.