Alibaba Group Holding Ltd (NYSE: BABA) Investor Securities Class Action Lawsuit 01/30/2015

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Company Name(s): 
Alibaba Group Holding
Case Name: 
Alibaba Group Holding Shareholder Class Action Lawsuit 01/30/2015
Case Status: 
Case Dismissed
Affected Securities
NYSE: BABA
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/30/2015
Class Period Begin: 
09/19/2014
Class Period End: 
01/29/2015
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
03/31/2015
Case Dismissed: 
06/21/2016
Summary: 

June 21, 2016 - The court granted defendants' motion to dismiss.

July 31, 2015 - Defendants filed a motion to dismiss.

July 1, 2015 - The lead plaintiffs filed an amended consolidated complaint on behalf of investors who purchased Alibaba Group Holding Ltd (NYSE: BABA) American Depositary Shares (ADS) or purchased call options or sold put options on Alibaba Group Holding Ltd ADS between September 19, 2014 and January 29, 2015. The lead plaintiffs allege that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between September 19, 2014 and January 29, 2015.

May 1, 2015 - Lead plaintiffs and lead counsel were appointed and all cases were consolidated.

March 31, 2015 - Lead plaintiff motions were filed.

January 30, 2015 - An investor in shares of Alibaba Group Holding Ltd (NYSE: BABA) filed a lawsuit in the U.S. District Court for the Southern District of New York against Alibaba Group Holding Ltd over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between October 21, 2014 and January 28, 2015.

According to the complaint the plaintiff alleges on behalf of purchasers of Alibaba Group Holding Ltd (NYSE: BABA) common shares between October 21, 2014 and January 28, 2015, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that that Alibaba Group Holding Ltd allegedly failed to disclose that Alibaba Group Holding Ltd executives had met with China’s State Administration of Industry and Commerce (“SAIC”) in July 2014, just two months before Alibaba Group Holding Ltd’s $25+ billion initial public offering in the United States (the “IPO”), and that regulators had then brought to Alibaba Group Holding Ltd’s attention a variety of highly dubious – even illegal – business practices.

The plaintiff alleges that in the IPO, Alibaba Group Holding Ltd (NYSE: BABA) and certain “selling shareholders” sold more than 368 million ADSs at $68 each and that selling shareholders included two of Alibaba Group Holding Ltd’s co-founders, Jack Ma and Joseph Tsai, each of whom sold millions of shares.

The plaintiff also alleges that between October 21, 2014 and January 28, 2015, Alibaba Group Holding Ltd’s ADSs continued trading at ever-increasing, allegedly artificially inflated prices reaching a high of $120 each in intraday trading on November 13, 2014 and that in November 2014, Alibaba Group Holding Ltd raised another $8 billion in a debt offering.

The plaintiff further claims that on January 28, 2015, before the opening of trading, various members of the financial media reported that SAIC had released a white paper accusing Alibaba Group Holding Ltd of engaging in the very illegal conduct disclosed to Alibaba executives in July 2014. "For a long time, Alibaba hasn't paid enough attention to the illegal operations on its platforms, and hasn't effectively addressed the issues," the government agency said. "Alibaba not only faces the biggest credibility crisis since its establishment, it also casts a bad influence for other Internet operators trying to operate legally." Shares of Alibaba Group Holding Ltd (NYSE: BABA) declined to as low as $87.36 per share on January 29, 2015.

On January 29, 2015, before the market opened, Alibaba Group Holding Ltd announced its financial results for the quarter ended December 31, 2014.

The plaintiff claims that that revenue growth missed the target defendants had led the investment community to expect and that profits declined 28% from Alibaba Group Holding Ltd’s fourth quarter 2013 results, and that the Alibaba Group Holding Ltd blamed an inability to monetize growing transactions on its mobile platforms, where advertising is less profitable than on personal computers. Shares of Alibaba Group Holding Ltd (NYSE: BABA) declined to as low as $88.11 per share on January 30, 2015.