- Oops!Something went wrong.Please try again later.
BENSALEM, Pa., December 16, 2021--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Cloopen Group Holding Limited ("Cloopen" or the "Company") (NYSE: RAAS): (a) American Depositary Shares ("ADSs") pursuant and/or traceable to the Company’s February 2021 initial public offering ("IPO" or the "Offering"); and/or (b) securities between February 9, 2021 and May 10, 2021, inclusive (the "Class Period"). Cloopen investors have until February 8, 2022 to file a lead plaintiff motion.
Investors suffering losses on their Cloopen investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
In February 2021, Cloopen conducted its IPO, selling 23 million ADSs at $16 per ADS.
On March 26, 2021, Cloopen released its 2020 fourth quarter financial results for the period ending December 31, 2020 – more than a month before the IPO. Cloopen reported revenues of $39.6 million, $2 million short of analysts’ consensus, as well as net losses of $46.8 million (a 466.9% year-over-year increase), and operating expenses of $27.6 million (a 30% year-over-year increase).
On this news, Cloopen’s shares fell $14.42, or 18.5%, to close at $11.75 per ADS on March 26, 2021.
On May 10, 2021, Cloopen filed its 2020 annual report, revealing that its dollar-based net customer retention rate for recurring solutions fell from 102.7% in 2019 to 86.8% in 2020, which meant that Cloopen’s purportedly "loyal" customer base was not "expand[ing]" into additional solutions and the Company’s growth strategy was not effective.
On this news, Cloopen’s shares closed at $8.97 per ADS on May 12, 2021. Since the IPO, Cloopen’s ADSs have traded as low as $2.70 per ADS, an 80% decline from the $16 IPO price.
The complaint filed in this class action alleges that the Registration Statement 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 that: (1) Cloopen’s "land and expand" strategy was failing and its customer base deteriorating; (2) the Company’s dollar-based net retention rate was not "stable," but rather had dropped significantly by the end of 2020; (3) at the time of the IPO, an increasing number of customers were not paying Cloopen for the services and/or solutions it provided, forcing Cloopen to recognize massive increases in its accounts receivable and its allowance for doubtful accounts; (4) because Cloopen had valued certain warrants at extremely low levels, the Company would recognize massive additional costs associated with those warrants; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
If you purchased Cloopen securities, have information or 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 Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com: https://www.businesswire.com/news/home/20211216005151/en/