LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Applied Digital Corporation (“Applied Digital” or the “Company”) (NASDAQ: APLD) securities between April 13, 2022 and July 26, 2023, inclusive (the “Class Period”). Applied Digital investors have until October 11, 2023 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On July 6, 2023, The Bear Cave and Wolfpack Research published reports alleging, among other things, that Applied Digital “relies on puffery over substance,” and “pumped up its stock . . . by claiming to pivot from a floundering business hosting bitcoin miners, to becoming a low-cost AI cloud service provider.” The reports further highlighted concerns regarding related party transactions, governance, and potential conflicts of interest.
On this news, Applied Digital’s stock price fell $1.27, or 14.2%, to close at $7.70 per share on July 6, 2023, thereby injuring investors.
Then, on July 26, 2023, The Friendly Bear published a report stating that Applied Digital’s board does not “meet the independence requirements under Nasdaq rules” and alleged that clear conflicts of interest undermined the Company’s investigation into sexual harassment claims made against its CEO the previous month, noting that the manner in which the claims were summarily dismissed by Applied Digital’s Audit Committee could subject Applied Digital to “significant legal blowback.”
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Applied Digital had overstated the profitability of its datacenter hosting business and its ability to successfully transition into a low-cost AI Cloud services provider; (2) Applied Digital’s Board of Directors was not independent within the meaning of NASDAQ listing rules; (3) accordingly, Applied Digital had overstated the efficacy of its business model and failed to maintain proper corporate governance standards; (4) the foregoing, once revealed, was likely to subject the Company to significant financial and/or reputational harm; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
Follow us for updates on Twitter: twitter.com/FRC_LAW.
If you purchased Applied Digital securities during the Class Period, you may move the Court no later than October 11, 2023 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Applied Digital securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to email@example.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.