NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-phoenix-tree-securities-class-action-lawsuit.html) today announced that it filed a class action seeking to represent purchasers of Phoenix Tree Holdings Limited (NYSE:DNK) American Depositary Shares (“ADSs”) pursuant and/or traceable to prospectuses and registration statements issued in connection with the Company’s January 22, 2020 initial public offering (“IPO”). This action was filed in the Southern District of New York and is captioned Wandel v. Gao, No. 20-3259.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Phoenix Tree ADSs during the Class Period to seek appointment as lead plaintiff in the Phoenix Tree securities class action lawsuit. A lead plaintiff acts on behalf of all other class members in directing the Phoenix Tree securities class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Phoenix Tree securities class action lawsuit. An investor’s ability to share in any potential future recovery of the Phoenix Tree securities class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Phoenix Tree securities class action lawsuit, you must move the Court no later than 60 days from today. If you wish to discuss the Phoenix Tree securities class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-phoenix-tree-securities-class-action-lawsuit.html.
The Phoenix Tree securities class action lawsuit charges Phoenix Tree, certain of its officers and directors, and the underwriters of the IPO with violations of the Securities Act of 1933. Phoenix Tree is a Cayman Islands holding company that leases and manages apartments in China, which it rents to tenants under the Danke Apartment and Dream Apartment brands. Phoenix Tree generates revenue primarily from rents and service fees. As of September 30, 2019, it operated in 13 cities in China, including Wuhan, where a portion of its 5,000-plus employees worked.
On October 28, 2019, Phoenix filed with the SEC a Registration Statement in connection with the IPO, which, after amendment, was declared effective on January 16, 2020. On January 17, 2020, Phoenix filed the Prospectus for the IPO, which incorporated and formed part of the Registration Statement (together, the “Offering Materials”). The Offering Materials were used to sell 9.6 million ADSs, representing 96 million Class A ordinary shares, at $13.50 per share. The underwriters also exercised their option to purchase an additional 304,933 ADSs. As a result, the Company received total net proceeds of approximately $128.4 million. The IPO was completed on January 22, 2020.
The complaint alleges that the Offering Materials issued in connection with the IPO omitted or otherwise misrepresented the nature and level of renter complaints the Company had received before and as of the IPO, as well as the demand in the Chinese residential rental market and the Company’s exposure to significant adverse developments resulting from the onset of the coronavirus in China – particularly in Wuhan – at the time of the IPO. After the IPO, reports emerged indicating that Phoenix was experiencing ongoing problems due to the coronavirus, which was causing financial and other harm to tenants.
On March 25, 2020, when Phoenix announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019, it told investors that it expected the coronavirus to adversely affect its financial performance for the nearly completed first quarter of 2020. Information regarding ongoing renter complaints also reached the market after the IPO, adversely affecting the Company. As of April 24, 2020, Phoenix Tree ADSs were trading at prices below $7.00 per ADS.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.