CD Projekt S.A. Class Action Lawsuit
- Company Name
- CD Projekt S.A.
- Stock Symbol
- OTGLY; OTGLF
- Class Period
- January 16, 2020 to December 17, 2020
- Central District of California
The CD Projekt S.A. class action lawsuit charges CD Projekt and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of CD Projekt securities between January 16, 2020 and December 17, 2020, inclusive (the “Class Period”). The CD Projekt class action lawsuit was commenced on December 24, 2020 in the Central District of California and is captioned Trampe v. CD Projekt S.A., No. 20-cv-11627.
CD Projekt engages in the development and digital distribution of videogames worldwide. For several years, CD Projekt had been devoting substantially all its resources to the development of Cyberpunk 2077, which CD Projekt described as an “open world, narrative-driven role-playing game.” The game was to be released on various platforms, including Sony’s Playstation 5 and Microsoft’s Xbox X and Xbox (“Next-Generation Consoles”), Microsoft’s Xbox Series One and Sony’s Playstation 4 (the “Current-Generation Consoles”), Windows, and Google’s Stadia. The original release date of the game was slated for April 17, 2020.
The CD Projekt class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (1) Cyberpunk 2077 was virtually unplayable on the Current-Generation Consoles due to an enormous number of bugs; (2) as a result, Sony would remove Cyberpunk 2077 from the Playstation store, and Sony, Microsoft and CD Projekt would be forced to offer full refunds for the game; (3) consequently, CD Projekt would suffer reputational and pecuniary harm; and (4) as a result, defendants’ statements about CD Projekt’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
CD Projekt launched Cyberpunk 2077 on December 10, 2020 and consumers soon discovered that the Current-Generation Console versions of Cyberpunk 2077 were error laden and difficult to play. On December 14, 2020, facing criticisms for delivering an unplayable, bug-ridden product, CD Projekt held a conference call where CD Projekt’s joint Chief Executive Officer, defendant Adam Michal Kicinski, called the Current-Generation Console versions of Cyberpunk 2077 “way below our expectations” and admitted that “[w]e underestimated the scale and complexity of the issues, we ignored the signals about the need for additional time to refine the game on the base last-gen consoles.” Following the release, the price of CD Projekt’s American Depositary Receipts (“ADRs”) fell 25% over three trading days. Over that same period, CD Projekt’s common share price fell more than 20%.
Then, on December 18, 2020, Sony issued a statement via the Playstation website that it would “offer a full refund for all gamers who have purchased Cyberpunk 2077 via PlayStation Store” and “be removing Cyberpunk 2077 from PlayStation Store until further notice.” Microsoft also announced that it would offer refunds for the game. That same day, CD Projekt stated that Sony’s decision to “temporarily suspend” sales of the game came after a discussion with CD Projekt. On this news, the price of CD Projekt’s ADRs fell nearly 16% while the price of CD Projekt’s common shares fell more than 10%, further damaging investors.
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