SAN DIEGO, July 22, 2021 (GLOBE NEWSWIRE) -- The BlueCity Holdings Limited class action lawsuit charges BlueCity Holdings Limited (NASDAQ: BLCT), certain of its top executives, the underwriters of BlueCity’s July 8, 2020 initial public offering (“IPO”), and others with violations of the Securities Act of 1933. The BlueCity class action lawsuit seeks to represent purchasers of BlueCity American Depositary Shares (“ADSs”) pursuant and/or traceable to the offering documents issued in connection with BlueCity’s IPO. The BlueCity class action lawsuit (Jiang v. BlueCity Holdings Limited, No. 21-cv-04044) was commenced on July 19, 2021 in the Eastern District of New York and is assigned to Judge Frederic Block.
If you suffered substantial losses and wish to serve as lead plaintiff of the BlueCity class action lawsuit, please provide your information by clicking here. You can also contact attorney J.C.Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at email@example.com. Lead plaintiff motions for the BlueCity class action lawsuit must be filed with the court no later than September 17, 2021.
CASE ALLEGATIONS: The BlueCity class action lawsuit alleges that BlueCity’s offering documents were false or misleading and/or failed to disclose that: (i) defendants had overstated BlueCity’s business and financial prospects; (ii) BlueCity was ill-equipped to absorb the costs of becoming a publicly traded company, including IPO- and growth-related costs; (iii) consequently, defendants had misrepresented BlueCity’s capability for sustainable growth; and (iv) as a result, the offering documents were materially false or misleading and/or failed to state information required to be stated therein.
On December 2, 2020, BlueCity issued a press release announcing its unaudited financial and operating results for the third quarter of fiscal year 2020. BlueCity’s press release reported, among other results, that its cost of revenues had increased 41.3% year-over-year, selling and marketing expenses had increased 86.3% year-over-year, technology and development expenses had increased 49.5% year-over-year, and general and administrative expenses had increased 4,349% year-over-year. BlueCity attributed its increased costs to, among other things, the growth of revenue-sharing costs, expenses related to its IPO, and increased advertising and promotion expenses and staff costs. On this news, BlueCity’s ADS price fell by nearly 23%.
Then, on March 23, 2021, BlueCity issued a press release announcing its results for the fourth quarter of fiscal year 2020. Among other results, BlueCity announced revenue of $42.7 million, missing consensus estimates by $3.92 million. BlueCity also reported that its cost of revenues had increased 29% year-over-year, selling and marketing expenses increased 56.7% year-over-year, technology and development expenses increased 9% year-over-year, and general and administrative expenses had increased 345.5% year-over-year. BlueCity attributed these increased costs to, among other things, the growth of revenue-sharing costs and live streaming services, increased advertising and promotion expenses and staff costs, increased staff cost in technology and development personnel, share-based compensation expenses, and increased professional fees and staff cost. On this news, BlueCity’s ADS price fell an additional 26%, further damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased BlueCity ADSs pursuant and/or traceable to the offering documents issued in connection with BlueCity’s IPO to seek appointment as lead plaintiff in the BlueCity class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the BlueCity class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the BlueCity class action lawsuit. An investor’s ability to share in any potential future recovery of the BlueCity class action lawsuit is not dependent upon serving as lead plaintiff.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors last year, more than double the amount recovered by any other securities plaintiffs’ firm. Please visit https://www.rgrdlaw.com/firm.html for more information.
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Robbins Geller Rudman & Dowd LLP
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J.C. Sanchez, 800-449-4900