Investors Urged to Contact Securities Litigation Partner James Wilson on Applied Digital Losses
New York, September 21, 2023 – As a leading national securities law firm, Faruqi & Faruqi, LLP is currently investigating potential claims against Applied Digital Corporation (NASDAQ: APLD). The firm reminds investors of the upcoming deadline on October 11, 2023, to seek the role of lead plaintiff in a federal securities class action against the company. Investors who suffered losses exceeding $100,000 between April 13, 2022, and July 26, 2023, are encouraged to contact Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).
Background
Applied Digital Corporation conducted its initial public offering (IPO) in April 2022, issuing 8 million shares of common stock priced at $5.00 per share. The primary underwriter of the IPO was B. Riley Securities, Inc., an investment bank and subsidiary of B. Riley Financial, Inc. The offering documents described various connections between Applied Digital and B. Riley, including the fact that Applied Digital’s CEO, Wesley Cummins, had sold a majority interest in a registered investment adviser to B. Riley Financial. Additionally, two members of the company’s board had close connections to B. Riley.
Alleged Misconduct
The complaint alleges that throughout the Class Period, Applied Digital made false and misleading statements about its business, operations, and compliance policies. It is claimed that the company overstated the profitability of its datacenter hosting business and its ability to transition into a low-cost AI Cloud services provider. Moreover, Applied Digital’s Board of Directors was accused of lacking independence within the meaning of NASDAQ listing rules. The alleged misconduct could subject the Company to significant financial and reputational harm and rendered its public statements misleading.
Market Scrutiny and Stock Price Changes
In July 2023, market analysts began examining Applied Digital’s business model and its connections to B. Riley Financial. Short reports published by Wolfpack Research, The Bear Cave, and The Friendly Bear raised questions about the company’s viability, corporate history, and potential conflicts of interest. Following the publication of these reports, Applied Digital’s stock price fell significantly.
Opportunity for Investors
Investors who suffered losses exceeding $100,000 between April 13, 2022, and July 26, 2023, may have a potential claim in the federal securities class action against Applied Digital. By contacting James Wilson, a securities litigation partner at Faruqi & Faruqi, LLP, investors can discuss their legal rights and explore the possibility of becoming the lead plaintiff. There is no cost or obligation involved in seeking further information about the case. Investors are encouraged to take this opportunity before the October 11, 2023 deadline.
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