SAN DIEGO & BEIJING--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP reminds investors that a purchaser of Phoenix Tree Holdings, Ltd. (NASDAQ: DNK) filed a class action complaint against the Company for alleged violations of the Securities Act of 1933 pursuant to the company's January 2020 initial public offering ("IPO"). Phoenix is a Cayman Islands holding company that leases and manages apartments in China.
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Phoenix Tree Holdings, Ltd. (DNK) Accused of Misleading Shareholders
According to the complaint, Phoenix held its IPO on January 22, 2020, offering approximately 9.6 million ADSs at $13.50 per share for gross proceeds of approximately $128.4 million. In its offering materials, Phoenix touted the Company's focus on residents and customer service as well as its use of data-driven technology to effectively compete in the market. The offering materials also recognized the adverse effects complaints from residents and the highly competitive residential rental market could have on its business. However, Phoenix failed to disclose that by the time of the IPO it was already (i) the subject of numerous complaints from tenants for questionable conduct, including deceptively inducing renters to procure loans whose proceeds financed the Company's business operations, and (ii) suffering from the coronavirus pandemic's impact on the residential rental market. On March 25, 2020, Phoenix announced its unaudited financial results for fourth quarter and fiscal year 2019, revealing that it expected coronavirus to adversely affect its financial performance for first quarter of 2020. Phoenix's ADSs currently trade at around $9.50 per share, representing an almost 30% decline from its IPO price.
Phoenix Tree Holdings, Ltd. (DNK) Shareholders Have Legal Options
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