NET Power Faces Investor Lawsuit Over Project Delays and Cost Overruns
26min read Investors in net power (NYSE: NPWR) are under a tight deadline to join a federal securities class action lawsuit alleging the company misled the public about the timeline, budget, and risks of its flagship Project Permian. The law firm Faruqi & Faruqi, LLP has set June 17, 2025, as the cutoff for investors who lost over $50,000 to seek appointment as lead plaintiff. The case centers on claims that the company obscured mounting challenges to its carbon capture plant, leading to catastrophic delays and cost overruns that triggered a 80% stock collapse since mid-2023.
The Project Permian Promise—and Its Unraveling
NET Power’s Project Permian, a $1.1 billion carbon capture power plant in Texas, was initially projected to begin operations in 2026. The company positioned it as a breakthrough in clean energy, touting its ability to generate electricity while capturing 100% of CO2 emissions. However, according to the lawsuit, executives allegedly downplayed supply chain bottlenecks, site-specific engineering hurdles, and regional regulatory risks.
The first major blow came in November 2023, when the company admitted delays, pushing the start date to late 2027 or early 2028. This news caused the stock to plummet 18.54%, closing at $10.85. A second bombshell followed on March 10, 2025: the project’s cost had nearly doubled to $1.7–2.0 billion, with completion pushed to 2029. Simultaneously, the company revealed its cash reserves had fallen from $580 million to $533 million by year-end . This triggered a 31.46% single-day drop, sending shares to $4.75. A final blow in April 2025 saw the CFO and COO depart amid turmoil, further depressing the stock by 5.75% to $2.13.
Stock Performance and Financial Declines
The stock’s trajectory underscores the severity of the missteps.
By March 2025, the company’s market capitalization had shrunk from over $2 billion to less than $500 million—a loss of 75% of its valuation. The lawsuit argues that these declines were avoidable if executives had disclosed risks earlier.
Legal and Financial Implications
The case hinges on whether NET Power’s public statements were “materially false and misleading” under federal securities laws. The firm alleges the company omitted critical details about:
- Supply chain disruptions: Delays in procuring specialized equipment.
- Site-specific challenges: Unforeseen geological or environmental issues at the Texas site.
- Regional regulatory hurdles: Permitting delays or compliance costs.
The lawsuit also highlights leadership instability, with the CFO and COO leaving amid the crisis. Such departures often signal internal dysfunction, raising red flags for investors.
Conclusion: A High-Stakes Crossroads for NET Power
The lawsuit’s outcome could reshape the company’s future. If plaintiffs prevail, shareholders may recover losses, though the exact amount depends on the court’s ruling. However, the broader concern is whether Project Permian can recover from its current trajectory.
Key data points underscore the risks:
- Cost overrun: A 54% increase from $1.1 billion to $2.0 billion.
- Cash burn: A $47 million decline in reserves over 18 months, leaving just $533 million as of late 2024.
- Stock performance: A cumulative 80% drop since the project’s initial delays.
For investors, the June 17 deadline is critical. Those holding shares during the June 2023–March 2025 period should act swiftly. Meanwhile, the case serves as a cautionary tale about overpromising in high-risk, capital-intensive projects. Until NET Power can demonstrate credible progress—or secure additional funding—the stock’s path forward remains fraught with uncertainty.
As the legal battle unfolds, investors should monitor regulatory filings, cash flow updates, and any signs of leadership stability. With Project Permian’s completion now slated for 2029, the question remains: Can the company deliver on its revised timeline, or is the dream of a breakthrough carbon capture plant slipping further away?
