The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Waterdrop Inc. (WDH)
LOS ANGELES--(BUSINESS WIRE)--Nov 12, 2021--
The Law Offices of Frank R. Cruz reminds investors of the upcoming November 15, 2021 deadline to file a lead plaintiff motion in the case filed on behalf of investors who purchased Waterdrop Inc. (“Waterdrop” or the “Company”) (NYSE: WDH ) American Depositary Shares (“ADSs” or “shares”) pursuant and/or traceable to the Company’s May 2021 initial public offering (the “IPO”).
If you are a shareholder who suffered a loss, click here to participate.
In May 2021, Waterdrop completed its IPO, selling 30 million ADSs at $12.00 per share.
Then, on June 17, 2021, Waterdrop reported its financial results for the quarter that closed before the IPO, disclosing among other results, that the Company’s operating costs and expenses had increased over 75%, or around RMB579.1 million, to RMB1,343.9 million, (US$205.1 million). As a result, the Company reported an operating loss for the quarter of RMB460.6 million (US$70.3 million), a four-fold increase over the prior year period.,
Then, on August 11, 2021, media outlets reported that the China Banking and Insurance Regulatory Commission directed insurance companies to terminate improper marketing and pricing practices and improve their user privacy protections. Bloomberg reported that “[r]egulators have since moved to shutter some operations including mutual aid healthcare platforms operated by Waterdrop.”
Then, on September 8, 2021, Waterdrop announced that its operating losses for the quarter ended June 30, 2021 had continued to increase, totaling RMB815.4 million (US$126.3 million), compared with an operating profit of RMB7.2 million for the same period of 2020.
On September 13, 2021, the Company’s ADSs dropped to a low of just $3 per ADS, or 75% below the IPO price.
The complaint filed 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 that: (1) Waterdrop had achieved a substantial portion of its historical revenue growth through illicit means that ran afoul of Chinese rules and regulations governing the insurance industry; (2) Waterdrop had been ordered by the Chinese government to shut down its mutual aid platform because of its failure to comply with Chinese law; (3) Waterdrop was under investigation by regulatory authorities for continued violations of Chinese law; (4) as a result of the foregoing, there existed a material undisclosed risk and substantial likelihood that Waterdrop would face severe adverse reactions by regulatory authorities following the IPO; (5) Waterdrop’s operating losses had increased more than four-fold in the first quarter of 2021 as a result of the cessation of its mutual aid business and rapidly growing customer acquisition costs; and (6) as a result of the foregoing, the registration statement’s representations regarding Waterdrop’s historical financial and operational metrics and purported market opportunities did not accurately reflect the actual business, operations, and financial results and trajectory of the Company in the lead up to the IPO, were materially false and misleading, and lacked a factual basis.
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If you purchased or otherwise acquired Waterdrop ADSs during the Class Period, you may move the Court no later than November 15, 2021 to request appointment as lead plaintiff in this putative class action lawsuit. 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 the pending class action lawsuit, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to firstname.lastname@example.org, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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/20211112005479/en/
CONTACT: The Law Offices of Frank R. Cruz, Los Angeles
Frank R. Cruz, 310-914-5007
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICES
SOURCE: The Law Offices of Frank R. Cruz
Copyright Business Wire 2021.
PUB: 11/12/2021 12:35 PM/DISC: 11/12/2021 12:35 PM