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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Glancy Prongay & Murray LLP Reminds Investors of Looming Deadline in the Class Action ...

September 28, 2021 GMT

LOS ANGELES, Sept. 28, 2021 (GLOBE NEWSWIRE) -- Glancy Prongay & Murray LLP (“GPM”) reminds investors of the upcoming November 15, 2021 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired 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 suffered a loss on your Waterdrop investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at https://www.glancylaw.com/cases/waterdrop-inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com to learn more about your rights.

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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.

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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 pursuant and/or traceable to the IPO, 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 Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.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.

Contacts
Glancy Prongay & Murray LLP, Los Angeles
Charles Linehan, 310-201-9150 or 888-773-9224
shareholders@glancylaw.com
www.glancylaw.com