Yunji Inc. Class Action Lawsuit
- Company Name
- Yunji Inc.
- Stock Symbol
- Class Period
- Purchasers of Yunji American Depositary Shares pursuant to Yunji’s May 3, 2019 initial public offering
- Eastern District of New York
On November 12, 2019, the Yunji Inc. class action lawsuit was filed charging Yunji, certain of its officers and directors, and the underwriters of the May 3, 2019 initial public offering (“IPO”) with violations of the Securities Act of 1933. The Yunji class action lawsuit was commenced in the Eastern District of New York on behalf of purchasers of Yunji American Depositary Shares (“ADSs”) pursuant to Yunji’s IPO and is captioned Chen v. Yunji Inc., et al., No. 1:19-cv-06403.
Yunji operates a social e-commerce platform in China pursuant to a membership-based business model.
The Yunji class action lawsuit alleges that the Registration Statement for the IPO was materially false and misleading and failed to disclose to investors that: (1) Yunji was shifting certain of its sales to its marketplace platform; (2) Yunji’s supply chain restructuring was likely to disrupt its relationships with suppliers; (3) the supply chain restructuring was likely to have an adverse impact on Yunji’s financial results; and (4) as a result of the foregoing, defendants’ positive statements about Yunji’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On August 22, 2019, Yunji disclosed a supply chain restructuring that shifted part of its merchandise sales to its marketplace platform, resulting in a year-over-year decrease in total revenues for the second quarter of 2019. On this news, Yunji’s share price declined nearly 11%, to close at $9.39 per share on August 22, 2019. Yunji’s share price continued to decline by more than 35% over the next three trading sessions to close at $6.05 per share on August 27, 2019, on unusually heavy trading volume. By the commencement of the Yunji class action lawsuit, Yunji’s stock was trading as low as $4.40 per share, a 60% decline from the $11 per share IPO price.
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