LOS ANGELES–(BUSINESS WIRE) – Frank R. Cruz Law Firm announces that a class action lawsuit has been filed on behalf of the individuals and entities that have purchased or otherwise acquired Qutoutiao Inc. (“Qutoutiao” or the “Company”): NASDAQ: QTT: (a) American Depositary Shares (“ADSs” or “Shares”) in accordance with the Company's initial public offering in September 2018 (“IPO” or the “Offering”) and / or traceable; and / or (b) Securities between September 14, 2018 and July 15, 2020 inclusive (the “Class Period”). Qutoutiao investors have until October 19, 2020 to file a lead plaintiff motion.
If you are a shareholder who has suffered a loss, click here to participate.
In September 2018, the company completed its IPO and sold 13.8 million ADS at $ 7.00 per share.
On December 10, 2019, Wolfpack Research released a report claiming, among other things, that the company overestimated its earnings by recording non-existent advances from advertisers. In addition, the report alleged that Qutoutiao replaced its third-party advertising agency with a related party, thereby circumventing the agent's oversight and allowing the company to "commit the unqualified advertising fraud that (Wolfpack) observed in its sample".
In that news, the company's share price fell $ 0.12, nearly 4%, and closed at $ 2.86 per share on December 11, 2019 in an unusually high trading volume
On July 15, 2020, hosts at a consumer rights gala stated that Qutoutiao had allowed ads on its platform to promote exaggerated or impossible claims of weight loss products. For example, one such ad offered free weight loss products worth $ 14,300 that would allow users to lose more than 30 pounds a month.
In that news, the company's share price fell $ 0.85, or 23%, to close at $ 2.84 per share on July 16, 2020 in an unusually high trading volume.
The complaint filed in this class action alleges that the defendants made materially false and / or misleading statements and failed to disclose material adverse facts about the company's business, business and prospects. In particular, Defendants have failed to advise investors: (1) that Qutoutiao has replaced its advertising agency with a related party, thereby circumventing third party control of the content and quality of advertising; (2) that the company placed advertisements on its mobile app for products whose claims could not be substantiated and were therefore considered false advertisements under the applicable regulations; (3) that the company would be exposed to increasing regulatory scrutiny and reputational damage as a result; (4) that as a result, the company's advertising revenue would be reasonably likely to decline; and (5) as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and / or unfounded.
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If you purchased Qutoutiao securities during the class period, you can ask the court to appoint the lead plaintiff no later than October 19, 2020. You don't need to take any action at this point to be a member of the class. You can keep an attorney of your choice or you can take no action and remain an absent member of the class. If you have purchased Qutoutiao securities, have information or would like to learn more about these claims, or if you have any questions about this announcement or your rights or interests in relation to these matters, please contact Frank R. Cruz of the Frank R. Law Firms. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067, 310-914-5007, by email at firstname.lastname@example.org or visit our website at www.frankcruzlaw.com. When inquiring by email, please include your mailing address, telephone number and number of shares purchased.
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