April 09, 2021 - An investor in shares of Ebang International Holdings Inc. (NASDAQ: EBON) filed a lawsuit in the U.S. District Court for the Southern District of New York captioned over alleged violations of Federal Securities Laws by Ebang International Holdings Inc. in connection with certain allegedly false and misleading statements made between June 26, 2020 and April 5, 2021.
China based Ebang International Holdings Inc., through its subsidiaries, engages in the research, design, and development of application-specific integrated circuit chips and manufacture of Bitcoin mining machines in China, the United States, Hong Kong, and internationally.
On or about June 26, 2020, Ebang International Holdings Inc. sold about 19.3 million shares of stock in its initial public stock offering (the "IPO") at $5.23 a share, raising nearly $101 million in new capital.
On April 6, 2021, a report was issued concerning Ebang International Holdings Inc. wherein the report detailed a series of alleged red flags about Ebang International Holdings Inc. Specifically, the report stated, "While the company represented that it would use the majority of its numerous capital proceeds to develop its business operations, our research discovered it instead directed much of the cash out of the company through a series of opaque deals with insiders and questionable counterparties."
Shares of Ebang International Holdings Inc. (NASDAQ: EBON) declined to $4.93 per share on April 8, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of Ebang International Holdings Inc. (NASDAQ: EBON) common shares between June 26, 2020 and April 5, 2021, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between June 26, 2020 and April 5, 2021, the defendants failed to disclose to investors that the proceeds from Ebang’s public offerings had been directed to an low yield, long term bonds to an underwriter and to related parties rather than used to develop the Company’s operations, that Ebang’s sales were declining and the Company had inflated reported sales, including through the sale of defective units, that Ebang’s attempts to go public in Hong Kong had failed due to allegations of embezzling investor funds and inflated sales figures, that Ebang’s purported cryptocurrency exchange was merely the purchase of an out-of-the-box crypto exchange, and 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.