The Klein Law Firm announces that a class action complaint has been filed on behalf of shareholders of Waterdrop Inc. (NYSE: WDH) who purchased in or traceable to the Company’s May 2021 initial public offering.. The action, which was filed in the United States District Court for the Southern District of New York, alleges that the Company violated federal securities laws.
In particular, the Waterdrop lawsuit alleges that (a) Waterdrop had achieved a substantial portion of its historical revenue growth through illicit means that ran afoul of Chinese rules and regulations governing the insurance industry; (b) Waterdrop had been ordered by the Chinese government to shut down its mutual aid platform because of its failure to comply with Chinese law; (c) Waterdrop was under investigation by regulatory authorities for continued violations of Chinese law; (d) as a result of (a)-(c) above, there existed a material undisclosed risk and substantial likelihood that Waterdrop would face severe adverse actions by regulatory authorities following the IPO; (e) Waterdrop’s operating losses had increased more than four-fold in the first quarter of 2021 as a result of the cessation of its mutual aid business and rapidly growing customer acquisition costs; and (f) as a result of (a)-(e) above, the Registration Statement’s representations regarding Waterdrop’s historical financial and operational metrics and purported market opportunities did not accurately reflect the actual business, operations, and financial results and trajectory of the Company in the lead up to the IPO, were materially false and misleading, and lacked a factual basis.
Shareholders have until November 15, 2021 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.
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