NEW YORK, Feb. 3, 2015 (GLOBE NEWSWIRE) -- Pomerantz LLP has filed a class action lawsuit against Alibaba Group Holding Ltd. ("Alibaba" or the "Company") (NYSE:BABA) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 15-cv-00811, is on behalf of a class consisting of all persons or entities who purchased Alibaba securities between October 21, 2014 and January 28, 2015, inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Alibaba securities during the Class Period, you have until March 31, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Alibaba is a China-based online and mobile commerce company in retail and wholesale trade, as well as cloud computing and other services.
The Complaint alleges that throughout the Class Period, Defendants issued materially false and misleading statements regarding the soundness of the Company's business operations, the strength of its financial prospects, and ongoing regulatory scrutiny. Specifically, Alibaba failed to disclose that Company executives had met with China's State Administration of Industry and Commerce ("SAIC") in July 2014, just two months before Alibaba's $25+ billion initial public offering in the United States (the "IPO"), and that regulators had then brought to Alibaba's attention a variety of highly dubious – even illegal – business practices that the SAIC advised Alibaba it was then actively clamping down on and which threatened the core of Alibaba's business.
On January 28, 2015, before the opening of trading, various members of the financial media reported that the SAIC, China's main corporate regulator, had released a white paper accusing Alibaba of engaging in the very illegal conduct disclosed to Alibaba executives in July 2014.
On this news, the price of Alibaba ADSs dropped 4%, or $4.49 per ADS, closing at $102.94 per ADS on January 28th, on unusually high volume of approximately 42 million shares trading.
On January 29, 2015, before the market opened, Alibaba issued a press release announcing its financial results for the fourth quarter 2014 ("4Q 2014") ended December 31, 2014. The Company reported revenues of just $4.22 billion for the 4Q 2014, significantly under-achieving the $4.45 billion target defendants had led the investment community to expect based on Alibaba's bullish statements throughout the Class Period concerning its ongoing purported strong revenue growth. The Company also disclosed that its profits had fallen to $964 million, or 37 cents per share, a 28% decline from the financial results for the fourth quarter 2013 ("4Q 2013"), a decline Alibaba largely attributed to expenses from giving shares to employees. The Company also attributed challenges generating revenues from transactions on its mobile platforms, where advertising is less profitable than on personal computers, and which comprised a larger percentage of sales in the quarter than in the previous quarter.
As a result of these disclosures, the price of Alibaba ADSs plummeted another $8.64 per ADS to close at $89.81 per ADS on January 29, 2015, a one-day decline of approximately 9%, again on extremely unusually high volume of more than 76.3 million shares trading.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.