SAN DIEGO & SHENZHEN, China--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of X Financial (NYSE: XYF) has sued the Company for alleged violations of the Securities Act of 1933 pursuant to its September 2018 initial public offering ("IPO"). X Financial provides personal finance services in the People's Republic of China.
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X Financial (XYF) Accused of Misleading Investors in IPO
According to the complaint, X Financial completed its IPO on September 19, 2018, offering 11.7 million American Depositary Shares ("ADSs") at $9.50 per ADS and raising more than $111 million in gross proceeds. Leading up to the IPO, X Financial claimed the Company was growing rapidly. Despite positive forward-looking statements, in November 2018, the Company's financial results for third quarter 2018 revealed a 40% sequential increase and 270% year-over-year increase in the delinquency rate for X Financial loans and a significant reduction in loans facilitated in the quarter. Then on April 25, 2019, X Financial disclosed in its annual report for 2018 on Form 20-F that there had been a dramatic increase in delinquency rates leading up to and during the IPO and that these negative trends were accelerating. Finally, on May 21, 2019, X Financial revealed in an earnings call that the Company was unlikely to achieve significant loan or revenue growth because its referred loan business had failed. Since these disclosures, X Financial's ADSs have consistently traded below $9.50. The stock currently trades at around $1.80 per ADS, representing an 80% plummet from its IPO price.
X Financial (XYF) Shareholders Have Legal Options
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