SAN DIEGO & HAIDIAN DISTRICT, Beijing--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of iQIYI, Inc. (NASDAQ: IQ) filed a class action complaint against the Company for alleged violations of the Securities Exchange Act of 1934 between March 29, 2018 and April 7, 2020. iQIYI provides online entertainment services under the iQIYI brand in China.
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iQIYI, Inc. (IQ) Accused of Misleading Shareholders
According to the complaint, in March 2018, iQIYI held its initial public offering ("IPO") offering approximately 125 million ADSs for $18 per share and raising approximately $2.25 billion in proceeds. In its Registration Statement, iQIYI touted impressive online revenue growth from 2015 to 2017 due to "increased attractiveness and efficiency of [its] advertising services." Following the IPO, iQIYI continuously touted its growing number of paying subscribing members as well as its increasing advertising services revenue. Despite auspicious financials, on April 7, 2020, Wolfpack Research released a report revealing iQIYI had misled investors and failed to disclose in its Registration Statement that: (i) iQIYI overstated its user numbers; (ii) iQIYI inflated its revenues; (iii) iQIYI inflated its expenses and prices of assets to conceal its revenue inflation; and (iv) iQIYI's misleading financial reporting created the appearance of a cash generative company. The report concluded "[iQIYI] was committing fraud well before its IPO in 2018 and has continued to do so ever since." On this news, ADSs of iQIYI fell almost 6% to close at $16.51 per ADS.
If you purchased iQIYI, Inc. (IQ) securities between March 29, 2018 and April 7, 2020, you have until June 15, 2020, to ask the court to be appointed lead plaintiff for the class.
Robbins LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. Click here to receive free alerts from Stock Watch when companies engage in wrongdoing.
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