- Company Name
- Uxin Limited
- Stock Symbol
- Class Period
- Purchasers of Uxin publicly traded securities pursuant to the June 27, 2018 initial public offering
- Motion Deadline
- April 12, 2019
- Eastern District of New York
The complaint charges Uxin, certain of its officers and/or directors and the underwriters of its June 27, 2018 initial public offering (“IPO”) with violations of the Securities Act of 1933. Uxin is a used car e-commerce platform in China that operates through two business segments: Uxin Auction (or 2B business), which sells used cars to dealers, and Uxin Used Car (or 2C business), which sells used cars to consumers.
On May 29, 2018, Uxin filed a Form F-1 registration statement with the SEC, which, after a series of amendments, became effective on June 26, 2018 (the “Registration Statement”). On June 28, 2018, Uxin filed a prospectus for the IPO, which forms part of the Registration Statement. Pursuant to the Registration Statement, defendants sold 25 million American Depositary Shares (“ADSs”) at a price of $9 per share. Each ADS represent three shares of Class A common stock. Uxin received approximately $205 million in net proceeds from the IPO.
The complaint alleges that the Registration Statement issued in connection with the IPO was negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made in the Registration Statement not misleading. Specifically, the Registration Statement contained misrepresentations and/or failed to disclose adverse information regarding Uxin’s business and prospects, including that Uxin was likely to stop providing complementary services, such as inspections, to its customers, and instead would connect consumers to dealers who would provide such complementary services, which would have a material impact on Uxin’s 2B business.
On August 22, 2018, Uxin announced its second quarter 2018 financial results and disclosed that it was making a strategic change to its 2B business. The Company stated that, “historically [Uxin] provided inspection and other complementary services that enabled consumers to sell used cars through [its] 2B business. Starting in the second half of 2018, [Uxin] will take an alternative approach that connects these consumers with quality dealers on [its] platform without [Uxin] providing inspection and other services directly.” The on November 19, 2018, Uxin announced its unaudited third quarter 2018 financial results, including an 8.5% year-over-year decrease in its 2B business volume. Uxin attributed these results to its “recent change of approach in serving customers with car-selling needs as disclosed in the prior quarter.” Following this news, the price of Uxin shares fell $0.60 per share, or more than 11%, to close at $4.50 per share, a 50% decline from the IPO price of $9 per share.