On June 22, 2015, Pomerantz LLP was appointed Lead Counsel in a class action lawsuit against Jumei International Holdings Limited. The class action, filed in United States District Court, Southern District of New York, and docketed under 14-cv-9993 is on behalf of a class consisting of all persons or entities who purchased American Depository Shares ("ADSs") of Jumei pursuant and/or traceable to the Registration Statement issued in connection with Jumei's May 16, 2014 initial public offering (the "IPO"). This class action seeks to recover damages against the Company, certain officers, and the underwriters, for potential violations of the federal securities laws.
Jumei operates as an online retailer of beauty products in the People's Republic of China. The Company provides various beauty products, including cosmetics, skin care and body care products, cosmetic applicators, and fragrance products, as well as beauty products for men, and baby and children. It also offers apparel and other lifestyle products comprising women's wear, lingerie, footwear, handbags and luggage, menswear, sportswear and sporting goods, accessories, home goods and other lifestyle products, luxury goods, and baby, children, and maternity products, as well as snacks and health supplements.
In January 2014, Jumei filed its Registration Statements with the Securities and Exchange Commission ("SEC") which, following several amendments in response to comments by the SEC, would later be used for the IPO.
The Complaint alleges that under the rules and regulations governing the preparation of the Registration Statement, Jumei was required to disclose at the time of the IPO that it had been relying upon dubious suppliers for its third-party "Marketplace" offerings, which it needed to cease doing business with, and that ceasing to do business with those suppliers would raise its product costs and would, at least temporarily, diminish its sales by decreasing the variety of products Jumei had to offer. According to the Complaint, the Registration Statement contained no such disclosures.
The Complaint further alleges that following Jumei's issuance of a July 2014 "Business Update" outlining a series of steps it would need to take to ensure the legitimacy of the products being sold on its website going forward and its reporting of its actual third quarter 2014 financial results (for the period ended September 30, 2014), which were negatively impacted by the business model changes described in the Business Update, and other related disclosures, the price of Jumei ADSs fell.
On December 11, 2014, shares of Jumei declined from as high as $39.45 on August 18, 2014 to as low as $12.87.