In its February 20 release, DNOW reported Q4 revenue declines driven by persistent ERP implementation failures at MRC Global following its November acquisition, marking an unexpected drag on earnings and increasing operational costs. Management acknowledged design architecture inefficiencies and system limitations that slowed order processing, raised safety stock levels and impeded customer service.

Investors reacted sharply, sending DNOW shares down 19% and erasing over $580 million in market capitalization in a single trading day. The stock plunge reflected growing concerns over execution risk and transparency regarding post-acquisition integration challenges.

A national shareholder rights firm has launched an investigation into whether DNOW’s pre-acquisition disclosures regarding MRC Global’s ERP status violated federal securities laws. The probe will examine November earnings call assurances that ERP issues were isolated against subsequent revelations of persistent system obstacles.

DNOW delayed its sequential and full-year 2026 guidance, citing ongoing ERP challenges within legacy MRC operations. The company anticipates additional remediation investments to resolve system deficiencies, which may weigh on free cash flow and operational margins.