Deadline Reminder: The Law Offices of Howard G. Smith Reminds Investors of Looming Deadline in the Class Action Lawsuit Against X Financial
BENSALEM, Pa.--(BUSINESS WIRE)--Dec 17, 2019--
Law Offices of Howard G. Smith reminds investors of the upcoming February 7, 2020 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased X Financial (“X Financial” or the “Company”) (NYSE: XYF ) American Depositary Shares (“ADSs”) pursuant and/or traceable to the Company’s September 19, 2018 initial public offering (“IPO” or the “Offering”).
Investors suffering losses on their X Financial investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
In September 2018, the Company completed its IPO selling 11.7 million ADSs at $9.50 per ADS.
On November 19, 2018, X Financial announced its third quarter 2018 financial results, reporting that its delinquency rate for loans was 3.51%, or more than a 40% increase from the prior quarter.
Then, on May 21, 2019, X Financial acknowledged that it was unlikely to achieve significant loan or revenue growth because its preferred loan business had failed over the last year and that it would shelve the entire business.
As of November 22, 2019, X Financial’s shares have traded as low as $1.74 per share, or 81% below the IPO price of $9.50 per share.
The complaint filed in this class action alleges that 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: (1) that the Company’s total loan facilitation amount was not growing, but rather was contracting; (2) that the number of investors actively using X Financial’s platform was shrinking; (3) that demand from small- and medium-sized enterprises for the Company’s preferred loans was plummeting; (4) that the Company’s preferred loans had performed so poorly that it had begun drastically scaling back its preferred loans in the first quarter of 2018, several months before the IPO, and was in the process of phasing out such loans completely; (5) that demand for the Company’s card loans was also plummeting; (6) that the revenue and loan facilitation growth provided in the registration statement leading up to the IPO was achieved by relaxed credit and due diligence standards, under which the Company had underwritten tens of millions of dollars’ worth of poor quality loans that suffered from a disproportionately high risk of default as compared to the Company’s earlier loan vintages; (7) that the Company was suffering from accelerated delinquency rates from poor quality loans that it had underwritten in the first, second, and third quarters of 2018, which had caused the Company’s delinquency rate to sharply rise; (8) that the Company’s product mix had significantly deteriorated; (9) that the Company’s net revenue was on track to decline by 22% during the third quarter of 2018; and (10) that as a result, the IPO Registration Statement was materially false and/or misleading and failed to state information required to be stated therein.
If you purchased X Financial ADSs, you may move the Court no later than February 7, 2020 to ask the Court to appoint you as lead plaintiff if you meet certain legal requirements. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com:https://www.businesswire.com/news/home/20191217005315/en/
CONTACT: Law Offices of Howard G. Smith
Howard G. Smith, Esquire
KEYWORD: PENNSYLVANIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICES
SOURCE: The Law Offices of Howard G. Smith
Copyright Business Wire 2019.
PUB: 12/17/2019 11:00 AM/DISC: 12/17/2019 11:00 AM