The Klein Law Firm announces that a complaint has been filed on behalf of shareholders who purchased shares of Pinduoduo Inc. (NASDAQ: PDD) pursuant and/or traceable to the Company’s July 26, 2018 initial public offering and/or between July 26, 2018 and July 31, 2018.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements and 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.
Shareholders have until October 22, 2018 to petition the court for lead plaintiff status. Your ability to share in any recovery does not require that you serve as lead plaintiff. You may choose to be an absent class member.
The individual defendants-appellees are some of the executives of Pinduoduo, Inc. (“Pinduoduo” or “the Company”), a Chinese business that runs an online marketplace for consumer goods.
All of Pinduoduo’s vendors must register using their real names in order for the platform to be able to track down any alleged unlawful activity. Pinduoduo rejected the charges and told Chinese media outlets this past Monday. The business said that prior to Chaping publishing the post, it had already suspended the vendor accounts identified by Chaping for “suspicious transactions” – without specifying whether the concerns related to gaming or not.
A platform for online shopping called Pinduoduo enables consumers to take part in collective purchase events. The business is headquartered in Shanghai, China, and was established in 2015. Pinduoduo concluded its initial public offering (IPO) on or around July 26, 2018, selling 85.6 million ADSs for $19.00 per share and raising $1.63 billion.
Pinduoduo, which launched just three years ago, has 4.3 billion total orders and 295 million active users in 2017. The biggest online retail market is in China, which also has other well-known e-commerce brands like Alibaba and JD.com. Among other things, Pinduoduo sells groceries, electronics, apparel, and household goods. Pinduoduo is China’s second-largest e-commerce site behind Alibaba, despite the fact that Amazon may be the most popular in the United States.
Overall, since the company’s foundation, this lawsuit is not a first for it. Forbes reports that 224 conflicts Pinduoduo had with Chinese consumers and businesses were ultimately settled. 224 disagreements may not be important given the more than 300 million active users. However, if Pinduoduo were to be held responsible for securities fraud in the United States, that may have serious implications for the company. Significant fines and penalties would probably be imposed on the corporation, and the affected investors might be entitled to a refund.
According to Pinduoduo, the verification process for goods sold on its platform would be strengthened. Huang Zheng, the CEO of the business, has pledged to “thoroughly rectify and reform” Pinduoduo and to cooperate with any inquiries made by the State Administration for Market Regulation of China.
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