NEW YORK--(BUSINESS WIRE)--Scott+Scott Attorneys at Law LLP (“Scott+Scott”), an international shareholder and consumer rights litigation firm, has filed a securities class action lawsuit against Yalla Group Limited (NYSE: YALA) (“Yalla” or the “Company”) and its Chief Executive Officer (“CEO”), Tao Yang, alleging violations of §§10(b) and 20(a) of the Securities Exchange Act (15 U.S.C. §§78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder (17 C.F.R. §240.10b-5). The action was filed in the Southern District of New York, and is captioned Crass v. Yalla Group Limited, No. 1:21-cv-06854, and states a “Class Period” of September 30, 2020 through August 9, 2021, inclusive.
If you purchased Yalla American Depositary Shares (“shares”) between September 30, 2020 and August 9, 2021, and have suffered a loss, realized or unrealized, you are encouraged to contact Jonathan Zimmerman for additional information at (888) 398-9312 or email@example.com.
Yalla is a voice-centric social networking and entertainment platform that operates mainly in the Middle East and Northern Africa (“MENA”) region. Its shares trade on the NYSE under the ticker YALA.
The lawsuit alleges that, throughout the Class Period, Yalla and its CEO made materially false and misleading statements regarding the Company’s business and financial metrics. Specifically, Defendants made false and/or misleading statements regarding, and/or failed to disclose that the Company overstated its user metrics and revenue and, as a result, the Company’s public statements were materially false and misleading at all relevant times.
On May 19, 2021, Swan Street Research (“Swan Street”) published a report (the “Swan Street Report”) addressing Yalla, entitled “Is Yalla Group a Multi $B Fraud? The ‘Clubhouse of the Middle East’ UAE Tech Unicorn that Never Was.” The Swan Street Report alleged, among other things, that the Company has been inflating its financial metrics, including its user data and its revenue, and characterized Yalla’s financial statements as “not credible.” On this news, the price of Yalla shares fell $1.31 per share, or 7.15%, to close at $17.01 per share on May 19, 2021.
The next day, May 20, 2021, analyst The Bear Cave issued a report entitled, “Problems at Yalla Group,” and Gotham City Research also tweeted that it was shorting Yalla shares. On this news, the price of Yalla shares fell an additional 6% on May 20 to close at $15.96.
Then, on August 9, 2021, after the markets closed, Yalla issued a press release entitled, “Yalla Group Limited Announces Unaudited Second Quarter 2021 Financial Results,” announcing its financial results for the second quarter of 2021 (“2Q21 Results”). The 2Q21 Results disclosed that Yalla had quarterly revenue of $66.62 million, which did not meet analysts’ expectations. On this news, the price of Yalla shares fell nearly 18.9% on August 10, 2021, closing at $10.99, down from its previous close price of $13.55.
Lead Plaintiff Deadline
The Lead Plaintiff deadline in this action is October 12, 2021. Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.
What You Can Do
If you purchased Yalla shares between September 30, 2020, and August 9, 2021, or if you have questions about this notice or your legal rights, you are encouraged to contact attorney Jonathan Zimmerman at (888) 398-9312 or firstname.lastname@example.org.
Scott+Scott has significant experience in prosecuting major securities, antitrust, and consumer rights actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide with offices in New York, London, Amsterdam, Connecticut, California, Virginia, and Ohio.
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