January 20, 2021 - An investor in shares of Lizhi Inc. (NASDAQ: LIZI) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by Lizhi Inc. in connection with certain allegedly false and misleading statements made in connection with Lizhi’s January 17, 2020 initial public offering (the “IPO” or the “Offering”).
China based Lizhi Inc. operates an online user-generated content audio community, interactive audio entertainment platform, and online audio platform in China. Lizhi Inc. reported that its annual Total Revenue rose from 798.56 million CNY in 2018 to over 1.18 billion CNY in 2019.
On or about January 17, 2020, Lizhi Inc. sold about 11 million shares of stock in its initial public stock offering (the IPO ), at $11.00 a share raising nearly $45.1 million in new capital.
However, since the IPO, Lizhi Inc. stock has plummeted to as low as $3.40 per share on September 14, 2020.
According to the complaint the plaintiff alleges on behalf of purchasers of Lizhi Inc. (NASDAQ: LIZI) common shares, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that the Registration Statement that was filed in connection with Lizhi’s IPO contained false and/or misleading statements and/or failed to disclose that at the time of the IPO, the coronavirus was already ravaging China, the home base, principal market, and significant hub for Lizhi, its employees, and its customers, that the complications associated with the coronavirus were already negatively affecting Lizhi’s business, as employees and customers contracted the virus, lost employment, or otherwise experienced difficulty in generating, publishing, and monetizing the content critical to Lizhi’s platform, that even prior to the IPO, Lizhi employees and customers complained of, and to, Lizhi, which harmed the Company’s reputation and financial condition and prospects, and that as a result, Defendants’ public statements were materially false and/or misleading at all relevant times.