Phoenix Tree Holdings Limited (NYSE: DNK) Investor Securities Class Action Lawsuit 04/27/2020

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Company Name(s): 
Phoenix Tree Holdings
Case Name: 
Phoenix Tree Holdings Shareholder Class Action Lawsuit 04/27/2020
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: DNK
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
04/27/2020
Class Period Begin: 
01/22/2020
Class Period End: 
04/24/2020
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
06/26/2020
Summary: 

April 24, 2020 - An investor in shares of Phoenix Tree Holdings Limited (NYSE: DNK) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Phoenix Tree Holdings Limited in connection with certain allegedly false and misleading statements made in connection with the Company’s January 22, 2020 initial public offering ("IPO").

China based Danke, one of the largest co-living platforms in China with the fastest growth, is redefining the residential rental market through technology and aims to help people live better. Phoenix Tree Holdings Limited reported that its annual Total Revenue rose from 656.78 million CNY in 2017 to over 2.67 billion CNY in 2018, and that its Net Loss increased from 285.64 million CNY in 2018 increased to over 1.36 billion CNY in 2018.
On or about January 22, 2020, Phoenix Tree Holdings Limited sold 9.6 million shares of stock in its initial public stock offering (the "IPO"), at $13.50 a share raising $130 million in new capital.
On March 25, 2020, Phoenix Tree Holdings Limited announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019. Phoenix Tree Holdings Limited told investors that it expected the coronavirus to adversely affect its financial performance for the nearly completed first quarter of 2020. Information regarding ongoing renter complaints also reached the market after the IPO, adversely affecting the Company.
Since the IPO, Phoenix Tree Holdings Limited shares declined to as low as $5.41 per share on April 6, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of Phoenix Tree Holdings Limited (NYSE: DNK) common shares, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that the Offering Materials issued in connection with the IPO omitted or otherwise misrepresented the nature and level of renter complaints the Company had received before and as of the IPO, as well as the demand in the Chinese residential rental market and the Company’s exposure to significant adverse developments resulting from the onset of the coronavirus in China – particularly in Wuhan – at the time of the IPO. After the IPO, reports emerged indicating that Phoenix was experiencing ongoing problems due to the coronavirus, which was causing financial and other harm to tenants.