NEW YORK - (NewMediaWire) - September 10, 2020 - Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Qutoutiao Inc. (“Qutoutiao” or the “Company”) (NASDAQ:QTT) of the October 19, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in Qutoutiao stock or options pursuant to the Company’s September 2018 IPO and/or between September 14, 2018 and July 15, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/QTT. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org.
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The lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all those who purchased Qutoutiao securities pursuant to the Company’s September 2018 IPO and/or between September 14, 2018 and July 15, 2020 (the “Class Period”). The case, Burnham v. Qutoutiao Inc. et al, No. 20-cv-06707 (S.D.N.Y. Aug 20, 2020) was filed on August 20, 2020.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by failing to disclose to investors: (1) that Qutoutiao replaced its advertising agent with a related party, thereby bypassing third-party oversight of the content and quality of the advertisements; (2) that the Company placed advertisements on its mobile app for products whose claims could not be substantiated and thus were considered false advertisements under applicable regulations; (3) that, as a result, the Company would face increasing regulatory scrutiny and reputational harm; (4) that, as a result, the Company’s advertising revenue was reasonably likely to decline; and (5) 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.
Specifically, on December 10, 2019, Wolfpack Research published a report, alleging among other things, that the Company had overstated its revenues by recording non-existent advances from advertising customers. Moreover, the report alleged that Qutoutiao replaced its third-party advertising agent with a related party, thereby bypassing the agent’s oversight and allowing the Company to “perpetrate the unmitigated ad fraud that [Wolfpack] observed in [its] sample.”
On this news, Qutoutiao stock fell from a closing price of $2.98 on December 10, 2019 to $2.86 on December 11, 2019—a $0.12 or 4.03% drop.
On July 15, 2020, hosts of a consumer rights gala stated that Qutoutiao had allowed ads on its platform promoting exaggerated or impossible claims from weight-loss products. For example, one such ad offered free weight-loss products valued at $14,300 that would help users lose more than 30 pounds a month.
On this news, Qutoutiao stock fell from a closing price of $3.69 on July 15, 2020 to $2.84 on July 16, 2020—a $0.85 or 23.04% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Qutoutiao’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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