NEW YORK, Nov. 05, 2023 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against GigaCloud Technology Inc (“GigaCloud” or the “Company”) (NASDAQ: GCT) and certain officers and directors. The class action, filed in the United States District Court for the Central District of California, and docketed under 23-cv-09134, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired GigaCloud: (a) Class A ordinary shares pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s August 2022 initial public offering (“IPO” or the “Offering”); and/or (b) securities between August 18, 2022 and September 27, 2023, inclusive (the “Class Period”). Plaintiff pursues claims under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased or otherwise acquired GigaCloud (a) Class A ordinary shares pursuant and/or traceable to the Registration Statement issued in connection with the Company’s August 2022 IPO, and/or (b) securities during the Class Period, you have until December 4, 2023 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 newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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GigaCloud is a holding company which, through its subsidiaries, offers an end-to-end ecommerce platform for global trade services of heavy and large products, primarily furniture. The Company’s ecommerce platform, which it refers to as the “GigaCloud Marketplace,” integrates discovery, payments and logistics tools to connect manufacturers, primarily in Asia, with resellers, primarily in the U.S., Asia and Europe, to execute cross-border transactions, then executes delivery and sale through a network of warehouses up to and including last-mile delivery to the customer.
On August 19, 2022, the Company filed its prospectus on Form 424B4 with the U.S. Securities and Exchange Commission, which forms part of the Registration Statement. In the IPO, the Company sold 3,381,000 Class A ordinary shares at $12.25 per share. The Company received net proceeds of approximately $34.2 million from the IPO. The proceeds from the IPO were purportedly to be used for general corporate purposes, including working capital, operating expenses, and capital expenditures.
The Complaint alleges that, in the Registration Statement and throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (i) that the Company’s business is a fraction of what it publicly claims, as evidenced by staffing and activity levels at its warehouses; (ii) that the Company overstated its last-mile operations; (iii) that the Company engaged in undisclosed related party transactions; (iv) that, as a result, the Company’s financial results were overstated; and (v) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On September 28, 2023, before the market opened, Culper Research published a report titled “GigaCloud Technology Inc (NASDAQ: GCT): If It’s Too Good To Be True...” (the “Report”), alleging “numerous glaring flaws” in GigaCloud’s public reporting. For example, the Report stated that while GigaCloud “claims to run 14 U.S. warehouses,” the Company “discloses just 73 employees in the entire U.S., implying just 5 employees per warehouse.” The Report also alleged that “GigaCloud’s marketing materials utilize photoshopped stock photos to portray itself as a highly efficient, growing operation,” but that Culper Research’s investigators visited some of the Company’s warehouses and discovered little activity. Further, the Report alleges that Culper Research uncovered “numerous entities which are neither named subsidiaries nor disclosed as GCT related parties” whose conduct at the very least “suggests undisclosed related party issues.”
On this news, the Company’s share price fell $1.78, or more than 18%, to close at $7.69 per share on September 28, 2023, on unusually heavy trading volume.
By the commencement of this action, GigaCloud’s shares have closed as low as $4.27 per share, a 65% decline from the $12.25 per share IPO price.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, 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, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz 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 billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980
