LOS ANGELES–(BUSINESS WIRE)–$QTT #classaction—Glancy Prongay & Murray LLP (“GPM”) announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York captioned Burnham v. Qutoutiao Inc., et al., (Case No. 20-cv-06707) on behalf of persons and entities that purchased or otherwise acquired Qutoutiao Inc. (“Qutoutiao” or the “Company”) (NASDAQ: QTT): (a) American Depositary Shares (“ADSs” or “shares”) pursuant and/or traceable to the Company’s September 2018 initial public offering (“IPO” or the “Offering”); and/or (b) securities between September 14, 2018 and July 15, 2020, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”) and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have 60 days from the date of this notice to move the Court to serve as lead plaintiff in this action.
If you suffered a loss on your Qutoutiao investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at https://www.glancylaw.com/cases/qutoutiao-inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at [email protected] to learn more about your rights.
In September 2018, the Company completed its IPO, selling 13.8 million ADSs at $7.00 per share.
On December 10, 2019, Wolfpack Research published a report, alleging among other things, that the Company had overstated its revenues by recording non-existent advances from advertising customers. Moreover, the report alleged that Qutoutiao replaced its third-party advertising agent with a related party, thereby bypassing the agent’s oversight and allowing the Company to “perpetrate the unmitigated ad fraud that [Wolfpack] observed in [its] sample.”
On this news, the Company’s share price fell $0.12, nearly 4%, to close at $2.86 per share on December 11, 2019, on unusually heavy trading volume
On July 15, 2020, hosts of a consumer rights gala stated that Qutoutiao had allowed ads on its platform promoting exaggerated or impossible claims from weight-loss products. For example, one such ad offered free weight-loss products valued at $14,300 that would help users lose more than 30 pounds a month.
On this news, the Company’s share price fell $0.85, or 23%, to close at $2.84 per share on July 16, 2020, on unusually heavy trading volume.
The complaint filed in this class action alleges that 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 Qutoutiao replaced its advertising agent with a related party, thereby bypassing third-party oversight of the content and quality of the advertisements; (2) that the Company placed advertisements on its mobile app for products whose claims could not be substantiated and thus were considered false advertisements under applicable regulations; (3) that, as a result, the Company would face increasing regulatory scrutiny and reputational harm; (4) that, as a result, the Company’s advertising revenue was reasonably likely to decline; and (5) 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.
If you purchased Qutoutiao securities during the Class Period, you may move the Court no later than 60 days from the date of this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles H. Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to [email protected], or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
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