Opera Limited Class Action Lawsuit
- Company Name
- Opera Limited
- Stock Symbol
- Class Period
- July 27, 2018 to January 15, 2020
- Southern District of New York
On January 24, 2020, the Opera Limited class action lawsuit was filed charging Opera and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and the Securities Act of 1933. The Opera class action lawsuit was commenced in the Southern District of New York on behalf of purchasers of Opera securities between July 27, 2018 and January 15, 2020 (the “Class Period”), including purchasers of Opera American Depositary Shares (“ADSs”) pursuant and/or traceable to Opera’s July 27, 2018 initial public offering (“IPO”) and is captioned Brown v. Opera Limited, et al., No. 20-cv-00674.
Opera provides mobile and personal computer web browser applications. In recent years, Opera has increasingly invested in fintech businesses, providing mobile loan and financing applications which are offered on Google’s Play Store marketplace as downloadable applications.
On August 9, 2018, Opera completed its initial public offering, issuing 9.6 million ADSs priced at $12 per share, raising approximately $115.2 million in proceeds before underwriting discounts and commissions and other expenses. The Opera class action lawsuit alleges that the offering documents for the IPO contained materially misleading statements and were not prepared in accordance with the federal securities laws. Similar misrepresentations were allegedly made throughout the Class Period. Specifically, the defendants failed to disclose that: (i) Opera had significantly overstated market opportunities and expected growth trends for its browser applications; (ii) Opera’s businesses relied on predatory lending practices; (iii) these facts, once revealed, were reasonably likely to have a material negative impact on Opera’s financial prospects, especially with respect to its lending applications’ continued availability on Google’s Play Store; and (iv) as a result, the defendants’ statements violated the federal securities laws.
On January 16, 2020, Hindenburg Research published a report asserting that it had “a 12-month price target of $2.60 on Opera, representing a 70% downside.” Among other issues, Hindenburg reported: (i) that Opera’s “browser market share is declining rapidly, down ~30% since its IPO”; (ii) that Opera was involved in “predatory short-term loans in Africa and India, deploying deceptive ‘bait and switch’ tactics to lure in borrowers and charging egregious interest rates ranging from ~365-876%”; (iii) that Opera’s lending business applications were “in black and white violation of numerous Google rules” aimed at “curtail[ing] predatory lending”; and (iv) that consequently, Opera’s entire lending business was “at risk of disappearing or being severely curtailed when Google notices” Opera’s alleged violation of its rules.
On this news, the price of Opera ADSs fell $1.69 per share, or more than 18%, to close at $7.33 per share on January 16, 2020.
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