Pomerantz LLP announces that a class action lawsuit has been filed against Pinduoduo Inc. (“Pinduoduo” or the “Company”) (NASDAQ: PDD) and certain of its officers and directors. The class action, filed in United States District Court, Southern District of New York, and docketed under index 18-cv-07625, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired the securities of Pinduoduo Inc. (“Pinduoduo”) pursuant and/or traceable to the Company’s July 26, 2018 initial public offering (the “IPO” or the “Offering”). Plaintiff pursues claims against the Defendants, under the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77 et seq.
If you are a shareholder who purchased Pinduoduo securities pursuant and/or traceable to the Company’s July 26, 2018 IPO, you have until October 22, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Pinduoduo is an e-commerce platform allowing users to participate in group buying deals. The Company was founded in 2015 and is based in Shanghai, China. On or around July 26, 2018, Pinduoduo completed its IPO, offering 85.6 million ADSs priced at $19.00 per share and raising $1.63 billion.
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. In the Registration Statement and Prospectus issued in connection with Pinduoduo’s IPO, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Pinduoduo’s controls were ineffective to prevent third-party vendors from selling counterfeit goods on the Company’s online platform; (ii) consequently, Pinduoduo’s revenues and the number of active merchants using its platform were traceable in part to unlawful conduct and thus unsustainable; and (iii) as a result, Pinduoduo’s public statements were materially false and misleading at all relevant times.
On July 31, 2018, and August 1, 2018, media outlets reported that China’s State Administration for Market Regulation was investigating Pinduoduo after reports of third-party vendors selling counterfeit goods on the Company’s group-discounting website.
On this news, the price of Pinduoduo ADSs fell $2.28, or 10.09%, to close at $20.31 on August 1, 2018. At the time of the filing of the complaint, Pinduoduo’s ADS price had not recovered, and traded below its Offering price of $19.00 per share.