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Cheetah Mobile Inc.

12 days left to seek lead plaintiff status

Case Summary

Company Name
Cheetah Mobile Inc.
Stock Symbol
CMCM
Class Period
April 26, 2017 to November 27, 2018
Motion Deadline
January 29, 2019
Court
Southern District of New York

The complaint charges Cheetah and certain of its officers with violations of the Securities Exchange Act of 1934.  Cheetah is a mobile internet company with global market coverage that has attracted hundreds of millions of monthly active users through its mobile utility products, such as Clean Master and Cheetah Keyboard, its casual games, such as Piano Tiles 2 and Bricks n Balls, and its live streaming product LiveMe.

The Company provides its advertising customers, which include direct advertisers and mobile advertising networks through which advertisers place their advertisements, with direct access to highly targeted mobile users and global promotional channels.  The Company also provides value-added services to its mobile application users through the sale of in-app virtual items on selected mobile products and games.

The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding Cheetah’s business and operations.  Specifically, defendants failed to disclose that Cheetah’s apps had undisclosed imbedded features that tracked when users downloaded new apps and that Cheetah was using this data to inappropriately claim credit for having caused the downloads.  In addition, the complaint alleges that these features, when discovered, would foreseeably subject the Company’s apps to removal from the Google Play store and, accordingly, that Cheetah’s Class Period revenues were in part the product of improper conduct and thus unsustainable.  As a result of this information being withheld from the market during the Class Period, the price of Cheetah American Depositary Receipts (“ADRs”) was artificially inflated to more than $16.50 per share.

Then on November 26, 2018, BuzzFeed News reported that certain Cheetah apps available in the Google Play store were exploiting user permissions as part of a fraudulent advertising scheme. The article stated that Cheetah’s apps “tracked when users downloaded new apps and used this data to inappropriately claim credit for having caused the download.”  BuzzFeed News further reported that two of Cheetah’s apps were removed from the Google Play store after publication of the article.  On this news, the price of Cheetah ADRs fell $3.32 per share, or nearly 37%, over the next two trading sessions to close at $5.48 per share on November 27, 2018.

Class Period: April 26, 2017 - November 27, 2018
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