Robbins LLP Reminds Investors of Class Action Against Applied Digital Corporation (APLD) for Misleading Investors
SAN DIEGO, Sept. 06, 2023 (GLOBE NEWSWIRE) — Robbins LLP reminds investors that a shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Applied Digital Corporation (NASDAQ: APLD) securities between April 13, 2022 and July 26, 2023. Applied Digital, previously known as Applied Blockchain, is a company that designs, develops, and operates datacenters in North America. It also provides artificial intelligence (“AI”) cloud services, computing datacenter hosting, and crypto datacenter hosting services.
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About the Case
The complaint alleges that during the class period, Applied Digital Corporation misled investors by overstating the profitability of its datacenter hosting business and its ability to transition into a low-cost AI Cloud services provider. Additionally, it is claimed that the company’s board of directors did not meet the independence requirements set by NASDAQ listing rules, and therefore, proper corporate governance standards were not maintained.
Market analysts Wolfpack Research and The Bear Cave published short reports on Applied Digital on July 6, 2023. The Wolfpack report raised questions about the viability of the Company’s business model, stating that Applied Digital falsely claimed to have switched from hosting bitcoin miners to becoming a low-cost AI Cloud service provider. The Bear Cave report criticized Applied Digital’s corporate history, accusing it of relying on puffery over substance. Following the reports, Applied Digital’s stock price declined by 14.16% to close at $7.70 per share.
Another report was published by The Friendly Bear on July 26, 2023. This report highlighted that Applied Digital’s board did not meet the independence requirements under Nasdaq rules and was essentially controlled by B. Riley. The news caused a 6% drop in Applied Digital’s stock price over the following two trading sessions.
What’s Next?
Shareholders who are similarly affected by Applied Digital Corporation’s alleged wrongdoing may be eligible to participate in the class action. To act as a lead plaintiff, shareholders must file their motion for lead plaintiff by October 11, 2023. A lead plaintiff represents other class members in the litigation. However, participation in the case is not necessary to be eligible for a recovery. If shareholders choose not to take any action, they can still remain as absent class members. Click here for more information.
Robbins LLP handles all representation on a contingency fee basis, meaning shareholders do not have to pay any fees or expenses.
About Robbins LLP
Unlike other law firms releasing information about this matter, Robbins LLP specializes in litigating securities class actions. Since 2002, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing. Over the years, Robbins LLP has successfully obtained over $1 billion for shareholders.
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Editor Notes
The class action filed against Applied Digital Corporation serves as a reminder that investors need to stay vigilant and aware of potential corporate misconduct. It is crucial to conduct thorough research and due diligence when investing in companies. By seeking the assistance of legal experts like Robbins LLP, shareholders have the opportunity to take action against companies that may have misled them or engaged in illegal activities.
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