NEW YORK, May 17, 2020 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Baidu, Inc. (“Baidu” or the “Company”) (NASDAQ: BIDU) and certain of its officers. The class action, filed in United States District Court for the Northern District of California, San Francisco Division, and indexed under 20-cv-02768, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Baidu securities between March 16, 2019, and April 7, 2020, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Baidu securities during the class period, you have until June 22, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlawfirm.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Baidu is a technology company specializing in Internet-related services and products and artificial intelligence (“AI”). The Baidu search engine is the second largest search engine in the world and the most widely used search engine in the People’s Republic of China (“PRC” or “China”), with a market share of more than 70%. The Company also provides a portfolio of apps that provide mobile device access to the Company’s search and feed services, along with social media services and both user-generated and professionally produced media content.
At all relevant times, Baidu has generated a substantial majority of its revenues from online marketing services, whereby Baidu integrates paid advertisements from its customers into its online products and services, taking advantage of the Company’s large user base and traffic. Accordingly, Baidu’s revenues depend, in large part, upon offering products and services that are accessible to a large and engaged user base.
Over the past several years, Baidu has increasingly emphasized its feed services. The Company added a personalized news feed to its search app in 2016, meaning that users can now wait passively for Baidu algorithms to display content based on the user’s past habits, rather than actively inputting search terms. Describing Baidu’s business model in a May 2019 article, the publication TechCrunch stated that “Baidu’s new two-legged strategy means feed is now of equal, if not more, weight alongside search as the company better embraces the mobile age.”
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Baidu’s feed services were not in compliance with applicable Chinese regulatory standards; (ii) the foregoing noncompliance subjected the Company to a heightened risk of regulatory enforcement, including the removal or suspension of certain of Baidu’s services and products; (iii) accordingly, the Company’s revenues derived from online marketing services were unlikely to be sustainable; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On April 7, 2020, post-market, China’s internet regulator, the Cyberspace Administration of China (“CAC”), ordered Baidu to clean up improper information and halt the spread of “low-brow content.” Specifically, the CAC stated that search engine Baidu's content review on some of its news feed channels is not “strict,” “exerted bad influence to the society,” and violated relevant Chinese laws and regulations.
On this news, Baidu’s American Depositary Receipt price fell $4.46 per share, or 4.38%, to close at $97.33 per share on April 8, 2020, damaging investors.
On April 9, 2020, Baidu issued a statement entitled “Baidu Takes Measures to Comply with Government Directives,” confirming that it had “suspended updating its content on certain newsfeeds channels within Baidu App and conduct maintenance, beginning from April 8, 2020” and stating that it “expects that the suspension may have impacted on the marketing services revenue related to the suspended channels.”
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlawfirm.com
Robert S. Willoughby