Qudian Inc. Class Action Lawsuit
- Company Name
- Qudian Inc.
- Stock Symbol
- Class Period
- December 13, 2018 to January 15, 2020
- Southern District of New York
On January 22, 2020, the Qudian Inc. class action lawsuit was filed charging Qudian and certain of its officers with violations of the Securities Exchange Act of 1934. The Qudian class action lawsuit was commenced in the Southern District of New York on behalf of purchasers of Qudian securities between December 13, 2018 and January 15, 2020 (the “Class Period”) and is captioned Bellingham v. Qudian Inc., et al., No. 20-cv-00577.
Qudian was founded in 2014 and is headquartered in the People’s Republic of China. Qudian provides online small consumer credit products using big data-enabled technologies, including artificial intelligence and machine learning. Qudian’s products include cash credit products, merchandise credit products to finance borrowers’ direct purchase of merchandise offered on its marketplace on an installment basis, and budget auto financing products. In addition, Qudian operates a platform for loan recommendations and referrals.
The Qudian class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose that: (i) regulatory developments in China threatened to negatively impact Qudian’s full year fiscal 2019 financial results; (ii) Qudian’s business was unprepared to mitigate the risks associated with these regulatory changes; (iii) as a result, Qudian’s loan portfolio was plagued by growing delinquency rates; and (iv) all of the foregoing made Qudian’s repeated assertions concerning its full year fiscal 2019 financial guidance unrealistic. As a result of this information being withheld from the market, Qudian American Depositary Shares (“ADSs”) traded at artificially inflated prices during the Class Period, reaching a high of more than $9 per ADS.
Then, on January 16, 2020, Qudian issued a press release announcing “that Qudian [was] withdraw[ing] its fiscal 2019 guidance and w[ould] not issue guidance in the near term due to uncertainty related to the recent regulatory and operating environment.” Qudian stated that “China’s online consumer finance industry was affected by several regulatory developments in the fourth quarter of 2019, including further restrictions on loan collection practices, more stringent user data privacy rules and the requirements for P2P [Peer to Peer] lending platforms to orderly exit their P2P businesses,” which had “reduced the availability of funding for consumer credit and driven up delinquency rates across the industry, including Qudian’s loan portfolio.” On this news, the price of Qudian ADSs fell $0.84 per share, or more than 19%, to close at $3.55 per ADS on January 16, 2020.
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