INVESTOR ALERT: Kirby McInerney LLP Reminds Investors That a Securities Class Action Lawsuit Has Been Filed on Behalf of Cloopen Group Holding Limited (RAAS) Investors and Encourages Investors to Contact the Firm Before February 8, 2022
Investors have until February 8, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
NEW YORK, Dec. 22, 2021 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired Cloopen Group Holding Limited (“Cloopen” or the “Company”) (NYSE: RAAS) American Depositary Shares (“ADSs”) (a) pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s February 2021 initial public offering (the “IPO”); and/or (b) acquired Cloopen securities from February 9, 2021 through May 10, 2021, inclusive (the “Class Period”). Investors have until February 8, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Cloopen is the largest multi-capability cloud-based communications solution provider in China. The Company purportedly is the only Chinese provider that offers a full suite of cloud-based communications solutions covering communications platform as a service (“CPaaS”), cloud-based contact centers (cloud-based CC), and cloud-based unified communications and collaborations (cloud-based UC&C). Cloopen serves a diverse and loyal customer base consisting of enterprises of all sizes across a variety of industries, including internet, telecommunications, financial services, education, industrial manufacturing, and energy.
On March 26, 2021, just over six weeks after its IPO, Cloopen shocked the market when it published its 4Q 2020 and FY 2020 financial results, for periods that closed on December 31, 2020, more than a month before the IPO. Cloopen reported 4Q 2020 revenues of just $39.6 million, $2 million shy of analysts’ consensus, net losses of $46.8 million, representing a staggering 466.9% increase year-over-year, and operating expenses of $27.6 million, representing a 30% increase over 4Q 2019. Cloopen blamed a “change in fair value of warrant liabilities of . . . US$34.4 million” for Cloopen’s remarkable net loss and “an increase in the provision for doubtful accounts resulting from increased in accounts receivables” for the 59.2% increase in general and administrative expenses. On this news, the price of Cloopen’s ADSs declined by $2.67 per ADS, or approximately 18.52%, from $14.42 per ADS to close at $11.75 per ADS on March 26, 2021.
On May 10, 2021, after the market closed, Cloopen filed its Annual Report on SEC Form 20-F, revealing additional facts about its failed growth strategy and withering customer base, including that its dollar-based net retention rate by year end 2020 fell far below historical periods.
The lawsuit alleges throughout the Class Period, the Registration Statement failed to disclose Cloopen’s growth strategy was allegedly not working, and its existing customers were abandoning the Company. It further alleges that the Registration Statement failed to disclose that an increasing number of Cloopen’s customers were refusing to pay, forcing the Company to record massive increases in its accounts receivables and allowance for doubtful accounts, and that the Registration Statement also allegedly failed to disclose that Cloopen was weighed down by huge liabilities related to the fair value of certain recently-granted warrants.
If you purchased or otherwise acquired Cloopen ADSs, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP by email at [email protected], or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-371-6600
https://www.kmllp.com
[email protected]
