Alibaba Group Holding Limited
Lead Plaintiff Deadline: 01/12/2021
SUMMARY OF CASE:
A securities class action has been filed against Alibaba Group Holding Limited (BABA) on behalf of persons and entities that purchased or otherwise acquired Alibaba securities between October 21, 2020 through November 3, 2020. This case has been filed in the USDC – S.D.N.Y.
Alibaba is an online and mobile commerce company. Alibaba owns a 33% equity interest in Ant Small and Micro Financial Services Group Co., Ltd. (“Ant Group”), a financial technology company that is best known for operates Alipay, one of the largest mobile and online payments platforms.
On July 20, 2020, Ant Group announced that it had begun the process of a concurrent initial public offering (“IPO”) on the Shanghai and Hong Kong stock exchanges. On October 26, 2020, Ant Group priced its IPO and was set to raise $34.5 billion, making it the largest public offering in history.
On November 2, 2020, Financial Times reported that Chinese regulators had met with Ant Group’s controller Jack Ma, executive chairman Eric Jing, Chief Executive Officer Simon Hu. The article stated that, though regulators did not provide details, “the Chinese word used to describe the interview – yuetan – generally indicates a dressing down by authorities.” The article also included a statement from Ant Group that it will “implement the meeting opinions in depth.”
On November 3, 2020, the IPO was suspended because Ant Group “may not meet listing qualifications or disclosure requirements due to material matters” related to the meeting with regulators the previous day and “the recent changes in the Fintech regulatory environment.”
On this news, the Company’s share price fell $25.27, or 8%, to close at $285.57 per share on November 3, 2020, on unusually heavy trading volume.
The Complaint 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: (1) that Ant Group did not meet listing qualifications or disclosure requirements for certain material matters; (2) that certain impending changes in the Fintech regulatory environment would impact Ant Group’s business; (3) that, as a result of the foregoing, Ant Group’s IPO was reasonably likely to be suspended; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis. 8.As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.