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iQIYI, Inc. (NASDAQ: IQ) Investor Securities Class Action Lawsuit 04/16/2020

  • If you purchased shares of iQIYI, Inc. (NASDAQ: IQ), you may have certain options. Please contact the Shareholders Foundation, Inc.

  • To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.

Lawsuit Overview

Company
iQIYI, Inc.
Security
NASDAQ: IQ

Case Name
iQIYI Shareholder Class Action Lawsuit 04/16/2020
Type of Lawsuit
Shareholder Class Action
Court of Filing
U.S. District Court for the Eastern District of New York

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Summary

January 19, 2021 - A consolidated complaint was filed.

April 16, 2020 - An investor in shares of iQIYI, Inc. (NASDAQ: IQ) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by iQIYI, Inc. in connection with certain allegedly false and misleading statements made between March 29, 2018 and April 7, 2020.

China based iQIYI, Inc., together with its subsidiaries, provides online entertainment services under the iQIYI brand in China. iQIYI, Inc. went public in March 2018 and sold roughly 125 million shares at $18 per share in its initial public offering (“IPO”). iQIYI, Inc. reported that its annual Total Revenue rose from over 24.98 billion CNY in 2018 to over 28.99 billion CNY in 2019, and that its Net Loss increased from over 9.1 billion CNY in 2018 to over 10.32 billion CNY in 2019. On April 7, 2020, a report was published entitled iQIYI: The Netflix of China? Good Luckin. wherein it detailed a series of alarming red flags about iQIYI. Specifically, the report stated, Our research shows us that iQIYI, Inc. ( IQ ) was committing fraud well before its IPO in 2018 and has continued to do so ever since. Like so many other China-based companies who IPO with inflated numbers, IQ is unable to legitimately grow their business enough to true up their financial statements. We estimate IQ inflated its 2019 revenue by approximately RMB 8-13 billion, or 27%-44% . Shares of iQIYI, Inc. (NASDAQ: IQ) declined to as low as $14.51 per hsare on April 7, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of iQIYI, Inc. (NASDAQ: IQ) common shares between March 29, 2018 and April 7, 2020, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between March 29, 2018 and April 7, 2020, the defendants made false and/or misleading statements and/or failed to disclose that iQIYI inflated its revenue figures, that iQIYI inflated its user numbers, that iQIYI inflated its expenses to cover up other fraud, and that as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. According to the suit, these true details were disclosed by a market research firm.