Investor Alert: Class Action Filed Against Applied Digital Corporation 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, originally known as Applied Blockchain, designs, develops, and operates datacenters in North America, and provides artificial intelligence (“AI”) cloud services, computing datacenter hosting, and crypto datacenter hosting services.
What is the Lawsuit About?
According to the complaint, during the class period, defendants failed to disclose that: (i) Applied Digital had overstated the profitability of its datacenter hosting business and its ability to successfully transition into a low-cost AI Cloud services provider; (ii) Applied Digital’s Board of Directors was not independent within the meaning of NASDAQ listing rules; and (iii) accordingly, Applied Digital had overstated the efficacy of its business model and failed to maintain proper corporate governance standards.
On July 6, 2023, market analysts Wolfpack Research and The Bear Cave published short reports on Applied Digital. The Wolfpack report raised questions about the viability of the Company’s business model, stating, for example, that the Company “pumped up its stock in May by claiming to pivot from a floundering business hosting bitcoin miners, to becoming a low-cost AI Cloud service provider,” and “[t]he explosion of interest in AI after the emergence of Chat GPT has predictably attracted the worst promoters []to peddle fake AI wares to credulous investors, and our analysis indicates that APLD is one of these grifters because it is not an AI company[.]” The Bear Cave report detailed Applied Digital’s problematic corporate history, alleging that “Applied Digital relies on puffery over substance and is a perfect case study on our market’s bizarre underbelly of reverse mergers, microcaps, and shell companies.” On this news, Applied Digital’s stock price fell $1.27 per share, or 14.16%, to close at $7.70 per share on July 6, 2023.
Then, on July 26, 2023, The Friendly Bear published a short report on Applied Digital, stating that Applied Digital’s board does not “meet[] the independence requirements under Nasdaq rules and . . . is essentially controlled by B. Riley,” among other things. On this news, Applied Digital’s stock price fell 6%, over the following two trading sessions, to close at $9.40 per share on July 28, 2023.
What Can Shareholders Do Now?
Similarly situated shareholders may be eligible to participate in the class action against Applied Digital Corporation. Shareholders who want to act as lead plaintiff for the class must file their motion for lead plaintiff by October 11, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
About Robbins LLP
Robbins LLP is a recognized leader in shareholder rights litigation, dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. To be notified if a class action against Applied Digital Corporation settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
Attorney Advertising. Past results do not guarantee a similar outcome.
Copyright 2023 GlobeNewswire, Inc.
Editor’s Notes: A Closer Look at the Applied Digital Corporation Class Action Lawsuit
The recent class action lawsuit filed against Applied Digital Corporation highlights the need for increased transparency and proper corporate governance in the business sector. Shareholders deserve accurate information to make informed investment decisions.
Applied Digital’s alleged overstatement of profitability and lack of independence within its Board of Directors raise concerns about the company’s business model. The reports by market analysts Wolfpack Research and The Bear Cave shed light on these issues, uncovering potential misrepresentations by the company.
It is important for shareholders to be aware of their rights and options in this class action. By participating as a lead plaintiff, individuals can play a crucial role in seeking justice and holding companies accountable for their actions.
Robbins LLP, a respected law firm specializing in shareholder rights litigation, offers valuable support to shareholders seeking fair compensation and improved corporate governance. Stay informed and sign up for Stock Watch to stay updated on developments in this case and receive alerts about corporate wrongdoing.
Transparency and accountability are essential for fostering trust in the financial markets. As investors, let’s work together to ensure fair practices and protect our investments.
Editor’s Conclusion
The class action against Applied Digital Corporation serves as a reminder that thorough research and careful consideration are crucial before making investment decisions. Stay updated with GPT News Room for the latest news and insights to navigate the dynamic world of finance.
from GPT News Room https://ift.tt/Bjvow07
No comments:
Post a Comment