The lawsuit, filed in the U.S. District Court for the Eastern District of Virginia, alleges that AeroVironment executives consistently characterized the SCAR program as a major growth engine even as the project faced mounting competition and operational hurdles. Investors claim the company’s public assurances masked significant risks, leading to sharp declines in share price when the reality of the contract’s collapse emerged.

Financial instability intensified throughout early 2026. After the U.S. government issued a stop-work order on the BADGER program in January, shares fell nearly 16%. A subsequent March report that the Space Force would reopen the program to other suppliers triggered a further 17% drop. By mid-March, AeroVironment disclosed a $179 million operating loss and a $151.3 million goodwill impairment tied to its space division, while recently announcing that earlier quarterly financial statements are no longer reliable and require restatement.