NET Power’s Stockholders Face Legal Crossroads Amid Project Delays and Financial Strains
18min read The stock of NET Power, Inc. (NYSE: NPWR) has faced a brutal reckoning in 2025, with investors now grappling with significant losses tied to delays and cost overruns in its flagship Project Permian. Rosen Law Firm and other legal entities are urging shareholders who suffered losses to seek information about their rights, as lawsuits allege the company misled investors about the project’s feasibility. This article examines the factors behind the turmoil, the legal risks, and what the future holds for this clean energy startup.
The Project Permian Crisis
NET Power’s troubles stem from its high-stakes Project Permian, a $1.7–2.0 billion utility-scale clean energy plant in West Texas. Initially projected to cost $1.1 billion and start operations by 2028, the project now faces a delayed completion date of no earlier than 2029, with costs nearly doubling. These revisions, disclosed on March 10, 2025, sent NPWR’s stock plummeting 31.5% to $4.75—a historic low—and triggered multiple class-action lawsuits.
The lawsuits, filed by Rosen Law Firm and others, accuse the company of misleading investors during the June 9, 2023–March 7, 2025 period by downplaying risks such as supply chain bottlenecks, inflation, and site-specific challenges. Plaintiffs argue these misrepresentations artificially inflated NPWR’s stock price, leading to losses once the truth emerged. Shareholders have until June 17, 2025, to join the litigation.
Financial Strains and Operational Realities
The March 10 disclosures revealed grim financials:
- 2024 Net Loss: $164.6 million, driven by $63.9 million in R&D and $30.3 million in administrative costs.
- Revenue: A paltry $250,000 in 2024, underscoring its reliance on future project execution.
- Cash Position: $533 million as of December 31, 2024—a $47 million drop from Q3 2024—due to operating outflows and capital expenditures.
The company paused long-lead equipment orders for Project Permian and initiated a cost-optimization process, including a modular plant design study and coastal deployment plans. While these efforts aim to reduce costs for future projects, they do little to address the immediate financial and reputational damage.
Leadership Changes and Regulatory Scrutiny
The crisis deepened in April 2025 with the ouster of Brian Allen (COO) and Akash Patel (CFO), signaling internal turmoil. Concurrently, the SEC is investigating the company’s financial reporting, focusing on its Q3 2023 loss disclosures and a $200 million equity financing. These actions amplify governance concerns, raising questions about the credibility of future updates.
The Legal and Investment Crossroads
Shareholders now face a stark choice: pursue legal recourse or wait for operational turnarounds. The lawsuits, if successful, could force the company to pay damages or reform disclosures. However, the path to recovery hinges on Project Permian’s execution.
While NPWR claims its modular design and coastal strategy could reduce costs for future plants, skepticism remains. The company’s minimal revenue, heavy reliance on external financing, and the FDA’s delayed approval of a PharmaCorp partnership (a potential future revenue stream) add layers of uncertainty.
Conclusion: A Risky Gamble for Investors
NET Power’s stockholders are caught in a high-stakes scenario. The lawsuits underscore systemic risks in project management and transparency, while the delayed, over-budget Project Permian raises doubts about the company’s ability to execute its core mission.
Key data points reinforce the caution:
- Stock Performance: NPWR’s share price has fallen 57% year-to-date by March 2025, eroding investor confidence.
- Financial Liquidity: With $533 million in cash, the company may survive near-term, but Project Permian’s revised $2 billion price tag demands substantial additional funding.
- Legal Exposure: The lawsuits, if settled unfavorably, could drain resources and deter future investment.
For investors, the calculus is grim. While NET Power’s carbon capture technology remains promising, the execution risks—exacerbated by governance issues and regulatory hurdles—suggest caution. Until Project Permian’s revised timeline and cost structure prove viable, NPWR’s stock remains a speculative bet rather than a stable investment.
In short, the path forward for NET Power is fraught with uncertainty, and shareholders must weigh the potential for long-term rewards against immediate legal and financial risks.
