**Pomerantz LLP Files Class Action Lawsuit Against Applied Digital Corporation**
*The Law Firm Encourages Shareholders to Join the Class Action and Contact Them for Further Information*
**NEW YORK, Sept. 5, 2023** /PRNewswire/ — Pomerantz LLP, a leading law firm specializing in securities litigation, has filed a class action lawsuit against Applied Digital Corporation (“Applied Digital” or the “Company”) APLD and certain officers. The lawsuit, filed in the United States District Court for the Northern District of Texas, is on behalf of all persons and entities who purchased or acquired Applied Digital securities between April 13, 2022 and July 26, 2023. The class period includes dates from April 13, 2022, to July 26, 2023.
The lawsuit alleges that the Company and its top officials violated federal securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Shareholders who purchased Applied Digital securities during the class period have until October 11, 2023, to request to be appointed as Lead Plaintiff for the class.
The Complaint, which outlines the details of the allegations, can be obtained at www.pomerantzlaw.com. Shareholders who wish to discuss the action or have any inquiries are encouraged to contact Robert S. Willoughby at newaction@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. When contacting the law firm by email, interested parties should include their mailing address, telephone number, and the number of shares purchased.
**Applied Digital’s Business and IPO**
Applied Digital, formerly known as Applied Blockchain, is a company specializing in the design, development, and operation of data centers in North America. The company also provides AI cloud services, computing data center hosting, and crypto data center hosting services.
In April 2022, Applied Digital conducted its initial public offering (IPO), where it issued 8 million shares of common stock at a price of $5.00 per share, collectively raising approximately $40 million. The primary underwriter of the IPO was B. Riley Securities, an investment bank and subsidiary of B. Riley Financial.
The IPO Prospectus revealed several close connections between Applied Digital and B. Riley, including the roles of Applied Digital’s CEO, Wesley Cummins, and members of the Board, Chuck Hastings and Virginia Moore. Despite these connections, which could potentially compromise the independence of the Board, Applied Digital assured investors that it had fulfilled the requirements of the NASDAQ listing rules.
**Alleged False and Misleading Statements**
Throughout the class period, the lawsuit alleges that Applied Digital and its top officials made false and misleading statements pertaining to the Company’s business, operations, and compliance policies. These alleged misrepresentations involve the profitability of Applied Digital’s data center hosting business, its ability to transition into a low-cost AI Cloud services provider, and the independence of its Board of Directors.
Market analysts began questioning Applied Digital’s business model and reviewing its connections to B. Riley. The reports published by Wolfpack Research and The Bear Cave highlighted concerns regarding the Company’s business model and corporate history. These reports contributed to a significant decline in Applied Digital’s stock price on July 6, 2023.
On July 26, 2023, The Friendly Bear published a report expressing the view that B. Riley was controlling managerial decisions at Applied Digital to the detriment of the Company’s shareholders. The report also alleged that Applied Digital’s board did not meet the independence requirements under Nasdaq rules and was essentially controlled by B. Riley.
**Stepping Forward – Join the Class Action**
If you purchased or acquired Applied Digital securities between April 13, 2022 and July 26, 2023, you may be eligible to participate in the class action lawsuit. By joining the class action, you can seek to recover damages caused by Defendants’ violations of securities laws. To learn more about your options and discuss your eligibility, contact Pomerantz LLP through the provided channels or visit www.pomerantzlaw.com for further information.
**Editor’s Note**
At GPT News Room, we are committed to providing timely and accurate information on important legal matters affecting individuals and businesses. We strive to cover significant class action lawsuits and other notable legal developments. Stay informed by visiting GPT News Room for the latest updates and expert analysis in the world of law.
*Opinion Piece: A Call for Accountability in Corporate Governance*
The class action lawsuit against Applied Digital Corporation raises important questions about the relationship between companies and their investors. It underscores the critical importance of transparency, independence, and compliance with securities laws. Investors have the right to accurate and reliable information when making decisions about their investments.
Corporate governance plays a crucial role in maintaining investor trust and protecting shareholder interests. It is crucial for companies to ensure that their boards of directors are truly independent and capable of exercising unbiased judgment. Failure to adhere to these standards can result in significant financial and reputational harm, as evidenced by the allegations against Applied Digital.
Investors should be encouraged to hold companies accountable for their actions. **GPT News Room** is dedicated to shedding light on such cases and providing a platform for shareholders to voice their concerns. To stay informed about the latest developments and opportunities for legal recourse, visit **GPT News Room** at [https://gptnewsroom.com](https://gptnewsroom.com).
**Disclaimer**
This article is intended for informational purposes only. It is not legal advice or a substitute for professional legal guidance. Every case is unique, and readers should consult with legal professionals regarding their individual circumstances.
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