Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against RLX, DraftKings, Stable Road, and Oatly and Encourages Investors to Contact the Firm

NEW YORK, July 28, 2021 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of RLX Technology, Inc. (NYSE: RLX), DraftKings, Inc. (NASDAQ: DKNG), Stable Road Acquisition Corp. (NASDAQ: SRAC), and Oatly Group AB (NASDAQ: OTLY). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.

RLX Technology, Inc. (NYSE: RLX)

Class Period: Pursuant and/or traceable to the January 22, 2021 IPO

Lead Plaintiff Deadline: August 9, 2021

RLX Technology purports to be the “No. 1 branded e-vapor company in China,” which it also claims is its “largest potential market.” In January 2021, as part of RLX Technology’s IPO, defendants issued approximately 116.5 million ADS to the investing public at $12 per ADS, raising approximately $1.4 billion in gross proceeds.

On or about March 22, 2021, China’s Ministry of Industry and Information Technology posted draft regulations confirming that e-cigarettes and new tobacco products would be regulated similar to traditional tobacco offerings. On this news, RLX Technology’s ADS price declined nearly 48%.

Then, on June 2, 2021, RLX Technology published its first quarter 2021 financial results, revealing a mere 48% increase in net revenues quarter over quarter, and second quarter guidance suggesting that its gross margin would only “remain steady.” On this news, RLX Technology’s ADS price fell an additional 9%. By the commencement of this action, RLX Technology’s ADSs traded more than 32% below the IPO offering price.

The RLX Technology class action lawsuit alleges that the Registration Statement contained untrue statements of material fact and omitted to state material facts both required by governing regulations and necessary to make the statements made not misleading. Among other things, the RLX Technology class action lawsuit alleges that the Registration Statement misrepresented and omitted that RLX Technology knew (or had information making it foreseeable to know), at the time of the IPO, that China was working on a national standard for e-cigarettes that would bring them into line with regular cigarette regulations. The RLX Technology class action lawsuit further alleges that RLX Technology knew that its reported financials were not nearly as rosy as the Registration Statement made it seem, nor indicative of future results. By omitting these facts and, for example, representing that the risk of regulation was only a contingent possibility, the RLX Technology class action lawsuit alleges that investors were unable to adequately assess the value of the shares offered in connection with the IPO, and thus purchased their ADSs without material information and to their detriment.

For more information on the RLX class action go to: https://bespc.com/cases/RLX

DraftKings, Inc. (NASDAQ: DKNG)

Class Period: December 23, 2019 to June 15, 2021

Lead Plaintiff Deadline: August 31, 2021

DraftKings operates as a digital sports entertainment and gaming company in the U.S. It operates through two segments, Business-to-Consumer and Business-to-Business. The Company provides users with daily sports, sports betting, and iGaming opportunities. It is also involved in the design, development, and licensing of sports betting and casino gaming platform software for online and retail sportsbook, and casino gaming products. The Company distributes its product offerings through various channels, including traditional websites, direct app downloads, and direct-to-consumer digital platforms. 

DraftKings was incorporated in Nevada as DEAC NV Merger Corp., a wholly owned subsidiary of its legal predecessor, DEAC, a special purpose acquisition company, or SPAC. On April 23, 2020, DEAC consummated transactions contemplated by a Business Combination Agreement (the “Business Combination”) dated December 22, 2019, as amended on April 7, 2020, and, in connection therewith, (i) DEAC merged with and into the Company, whereby the Company survived the merger and became the successor issuer to DEAC, (ii) the Company changed its name to “DraftKings Inc.,” (iii) the Company acquired DraftKings Inc., a Delaware corporation (“Old DK”), by way of a merger, and (iv) the Company acquired all of the issued and outstanding share capital of SBTech (Global) Limited (“SBTech”). Upon Case 1:21-cv-05739 Document 1 Filed 07/02/21 Page 2 of 34 3 consummation of the preceding transactions, Old DK and SBTech became wholly owned subsidiaries of the Company. 

On June 15, 2021, Hindenburg Research (“Hindenburg”) published a report addressing DraftKings, alleging that the Company’s merger with SBTech exposed DraftKings to dealings in black-market gaming. Citing “conversations with multiple former employees, a review of SEC and international filings, and inspection of back-end infrastructure at illicit international gaming websites,” Hindenburg alleged that “SBTech has a long and ongoing record of operating in black markets,” estimating that 50% of SBTech’s revenue is from markets where gambling is banned.” 

Following publication of the Hindenburg report, DraftKings’ stock price fell $2.11 per share, or 4.17%, to close at $48.51 per share on June 15, 2021. 

The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) SBTech had a history of unlawful operations; (ii) accordingly, DraftKings’ merger with SBTech exposed the Company to dealings in black-market gaming; (iii) the foregoing increased the Company’s regulatory and criminal risks with respect to these transactions; (iv) as a result of all the foregoing, the Company’s revenues were, in part, derived from unlawful conduct and thus unsustainable; (v) accordingly, the benefits of the Business Combination were overstated; and (vi) as a result, the Company’s public statements were materially false and misleading at all relevant times. 

For more information on the DraftKings class action go to: https://bespc.com/cases/DKNG

Stable Road Acquisition Corp. (NASDAQ: SRAC)

Class Period: October 7, 2020 and July 13, 2021

Lead Plaintiff Deadline: September 13, 2021

On October 7, 2020, Stable Road and Momentus – a private commercial space company – issued a joint press release announcing that Stable Road had agreed to acquire Momentus in a proposed merger, subject to shareholder approval. The press release stated that the merger would “create the first publicly traded space infrastructure company at the forefront of the new space economy.”

On January 25, 2021, Momentus announced that defendant Kokorich had resigned as Momentus’s CEO “in an effort to expedite the resolution of U.S. government national security and foreign ownership concerns surrounding the Company.” On this news, the price of Stable Road Class A stock fell 19% over three trading days, to close at $20.10 per share on January 27, 2021.

Then, on July 13, 2021, the U.S. Securities and Exchange Commission (“SEC”) announced charges against Stable Road, its CEO, defendant Brian Kabot, SRC-NI Holdings, Momentus, and defendant Kokorich for making “misleading claims about Momentus’s technology and about national security risks associated with Kokorich.” The release, among other things, stated that all parties other than defendant Kokorich had settled the charges against them for $8 million in total, while the case against defendant Kokorich continued. Also on July 13, 2021, the SEC publicized a cease-and-desist order and complaint against defendant Kokorich which detailed defendants’ scheme to defraud investors in connection with the merger. 

On this news, on July 14, 2021, the price of Stable Road Class A stock fell $1.22 per share, or 10%, to close at $10.66 per share.

The Stable Road class action lawsuit alleges that, throughout the Class Period, defendants misrepresented and failed to disclose adverse facts about Momentus’s business, operations, and prospects and Stable Road’s due diligence activities in connection with the merger, which were known to defendants or recklessly disregarded by them, as follows: (a) Momentus’s 2019 test of its key technology, a water plasma thruster, had failed to meet Momentus’s own public and internal pre-launch criteria for success, and was conducted on a prototype that was not designed to generate commercially significant amounts of thrust; (b) the U.S. government had conveyed that it considered Momentus’s CEO, defendant Mikhail Kokorich, a national security threat, which jeopardized Kokorich’s continued leadership of Momentus and Momentus’s launch schedule and business prospects; (c) consequently, the revenue projections and business and operational plans provided to investors regarding Momentus and the commercial viability and timeline of its products were materially false and misleading and lacked a reasonable basis in fact; and (d) Stable Road had failed to conduct appropriate due diligence of Momentus and its business operations and defendants had materially misrepresented the due diligence activities being conducted by Stable Road executives and its sponsor in connection with the merger.

For more information on the Stable Road class action go to: https://bespc.com/cases/SRAC

Oatly Group AB (NASDAQ: OTLY)

Class Period: May 20, 2021 and July 15, 2021

Lead Plaintiff Deadline: September 24, 2021

Oatly is the world’s original and largest oatmilk company. It is organized under the laws of Sweden and held its U.S. Initial Public Offering in May 2021.

On July 14, 2021, before the market opened, short seller Spruce Point issued a Report entitled, “Sour on an Oat-lier Investment.” The 124-page Report alleged a wide array of misconduct and misstatements by Oatly, including that it wrongfully overstated its revenue, gross margin, accounting, and capital expenditure metrics; the proprietary nature of its production process and formula; and its growth story in China, among other things. A number of news outlets reported on the Spruce Point Report over the following days.

On this news, the price of Oatly ADSs fell 7.8% over two days, from a close price of $21.13 on July 13, 2021, to a close price of $19.48 on July 15, 2021.

The action alleges that Oatly and the other defendants made materially false and/or misleading statement to investors during the Class Period. Specifically, the action alleged that Oatly: (a) overinflated its gross margins, revenue, and capital expenditure financial metrics; (b) overstated the proprietary nature of its formulas and manufacturing process; (c) exaggerated its success in China; and (d) as a result of the foregoing, Oatly’s statements about its operations, business, and prospects were misleading during the Class Period.

For more information on the Oatly class action go to: https://bespc.com/cases/OTLY

About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
Marion Passmore, Esq.
(212) 355-4648
[email protected]
www.bespc.com