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NEW YORK, Oct. 13, 2020 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased Qutoutiao, Inc. (NASDAQ: QTT) securities (a) pursuant and/or traceable to the Company’s September 2018 initial public offering (“IPO”); and/or (b) between September 14, 2018 and July 15, 2020, inclusive (the "Class Period"). Investors have until October 19, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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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, or nearly 4%, to close at $2.86 per share on December 11, 2019.
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.
The complaint, filed on August 20, 2020, 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 and/or pursuant or traceable to the IPO, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at email@example.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.