SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a securities class action lawsuit has been filed in the Northern District of California on behalf of purchasers of Baidu, Inc. (NASDAQ:BIDU) securities between March 16, 2019 and April 7, 2020 (the “Class Period”). The case is captioned Ikeda v. Baidu, Inc., No. 20-cv-2768, and is assigned to Judge Lucy H. Koh. The Baidu securities class action lawsuit charges Baidu and certain of its officers with violations of the Securities Exchange Act of 1934.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Baidu securities during the Class Period to seek appointment as lead plaintiff in the Baidu securities class action lawsuit. A lead plaintiff acts on behalf of all other class members in directing the Baidu securities class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Baidu securities class action lawsuit. An investor’s ability to share in any potential future recovery of the Baidu securities class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Baidu securities class action lawsuit or have questions concerning your rights regarding the Baidu securities class action lawsuit, please visit our website by clicking here or contact Brian Cochran at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions for the Baidu securities class action lawsuit must be filed with the court no later than June 22, 2020.
Baidu is a technology company specializing in Internet-related services and products and artificial intelligence. Baidu generates a substantial majority of its revenues from online marketing services, whereby Baidu integrates paid advertisements from its customers into its online products and services, taking advantage of Baidu’s large user base and traffic. Accordingly, Baidu’s revenues depend, in large part, upon offering products and services that are accessible to a large and engaged user base.
Over the past several years, Baidu has increasingly emphasized its feed services. Baidu added a personalized news feed to its search app in 2016, which allows users to wait passively for Baidu algorithms to display content based on the user’s past habits, rather than actively inputting search terms. Describing Baidu’s business model in a May 2019 article, the publication TechCrunch stated that “Baidu’s new two-legged strategy means feed is now of equal, if not more, weight alongside search as the company better embraces the mobile age.”
The Baidu securities class action lawsuit alleges that throughout the Class Period, defendants failed to disclose that: (i) Baidu’s feed services were not in compliance with applicable Chinese regulatory standards; (ii) the foregoing noncompliance subjected Baidu to a heightened risk of regulatory enforcement, including the removal or suspension of certain of Baidu’s services and products; and (iii) accordingly, Baidu’s revenues derived from online marketing services were unlikely to be sustainable. As a result of this information being withheld from the market, Baidu securities traded at artificially inflated prices during the Class Period, with the price of Baidu’s American Depositary Receipts (“ADRs”) reaching a high of more than $180 per share.
On April 7, 2020, after the market closed, China’s internet regulator, the Cyberspace Administration of China (“CAC”), ordered Baidu to clean up improper information and halt the spread of “low-brow content.” Specifically, the CAC stated that Baidu’s content review on some of its news feed channels was not “strict,” “exerted bad influence to the society,” and violated relevant Chinese laws and regulations. On this news, the price of Baidu ADRs fell $4.46 per share, or more than 4%, to close at $97.33 per share on April 8, 2020.
On April 9, 2020, Baidu issued a statement entitled “Baidu Takes Measures to Comply with Government Directives.” The statement confirmed that Baidu had “suspended updating its content on certain newsfeed channels within [the] Baidu App and [would] conduct maintenance, beginning [on] April 8, 2020” and stated that it “expects that the suspension may have impact on the marketing services revenue related to the suspended channels.”
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.