NEW YORK, Oct. 11, 2022 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Lottery.com, Inc. (NASDAQ: LTRY, LTRYW), NIO, Inc. (NYSE: NIO), Dingdong (Cayman) Ltd. (NYSE: DDL), and Stitch Fix, Inc. (NASDAQ: SFIX). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Lottery.com, Inc. (NASDAQ: LTRY, LTRYW)
Class Period: November 15, 2021 – July 29, 2022
Lead Plaintiff Deadline: October 18, 2022
On July 6, 2022, Lottery.com disclosed that an internal investigation, conducted by independent counsel, had uncovered “instances of non-compliance with state and federal laws concerning the state in which tickets are procured as well as order fulfillment.” In addition, the investigation revealed “issues pertaining to the Company’s internal accounting controls.” Accordingly, on June 30, 2022, the Board terminated the Company’s President, Treasurer, and Chief Financial Officer Ryan Dickinson.
On this news, Lottery.com’s stock price fell $0.15 per share, or more than 12%, to close at $1.07 per share on July 6, 2022.
Then, on July 15, 2022, Lottery.com announced that Chief Revenue Officer Matthew Clemenson had resigned on July 11, 2022, effective immediately. The Company also provided an update on the independent investigation previously disclosed on July 6, 2022, reporting that it had “overstated its available unrestricted cash balance by approximately $30 million and that, relatedly, in the prior fiscal year, it improperly recognized revenue in the same amount.” Accordingly, “[t]he Company, in consultation with its outside advisors, is currently validating its preliminary conclusion, assessing any impact on previously issued financial reports, and has begun to institute appropriate remedial measures.”
On this news, Lottery.com’s stock price fell $0.14 per share, or more than 14.5%, to close at $0.82 per share on July 16, 2022.
The Company made a series of additional adverse disclosures before finally, on July 29, 2022, in SEC filing, informing the market that it did not have “sufficient financial resources to fund its operations or pay certain existing obligations,” and that it is therefore intended to furlough certain employees effective July 29, 2022. Moreover, because Lottery.com’s resources were not sufficient to fund its operations for a twelve-month period, “there is substantial doubt about the Company’s ability to continue as a going concern,” and the Company may be forced to wind down its operations or pursue liquidation of the Company’s assets.
In reaction to this news, shares of Lotter.com lost 64% of their value in a single trading day, falling $0.52 per share, from a closing price of $0.81 per share on July 28, 2022 to a close of $0.29 per share on July 29, 2022.
According to the Complaint, the Company made false and misleading statements to the market. Lottery.com failed to maintain appropriate accounting controls. The Company also failed to maintain appropriate controls over financial reporting including revenue recognition and the reporting of cash. The Company was not in compliance with laws related to the sale of lottery tickets. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Lottery.com, investors suffered damages.
For more information on the Lottery.com class action go to: https://bespc.com/cases/LTRY
NIO, Inc. (NYSE: NIO)
Class Period: August 20, 2020 – July 11, 2022
Lead Plaintiff Deadline: October 24, 2022
On June 28, 2022, Grizzly Research published a report alleging, among other things, that NIO inflated its net income by about 95% through sales to a related party, Wuhan Weineng Battery Asset Co. (“Weineng”).
On this news, the Company’s American Depositary Shares (“ADSs” or “shares”) fell $0.59, or 2.5%, to close at $22.36 per share on June 28, 2022, on unusually heavy trading volume.
Then, on July 11, 2022, NIO announced that it formed a special committee to oversee an investigation into the allegations in the Grizzly Research report.
On this news, the Company’s shares fell $2.03, or 8.9% to close at $20.57 per share on July 11, 2022, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that NIO pulled forward revenue by selling batteries to a related party, which owned the batteries and managed users’ subscriptions; (2) that, through the related party, NIO also recognized enormous depreciation savings; (3) that, as a result of the foregoing, the Company’s revenue and net loss were overstated; and (4) 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.
For more information on the NIO class action go to: https://bespc.com/cases/NIO
Dingdong (Cayman) Ltd. (NYSE: DDL)
Class Period: Pursuant to the Company’s June 29, 2021 IPO
Lead Plaintiff Deadline: October 24, 2022
Dingdong purports to be a leading and the fastest growing on-demand e-commerce company in China. Dingdong conducted its IPO in New York, and its ADS are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “DDL.”
In June 2021, as part of Dingdong’s IPO, Defendants issued approximately 4.07 million ADS to the investing public at $23.50 per ADS, all pursuant to the Registration Statement.
According to the Registration Statement, Dingdong’s mission is to “make fresh groceries as available as running water to ever household.” To achieve this end, Dingdong has purportedly “embraced a user-centric philosophy” that is committed to “directly providing users and householders… fresh produce, mean and seafood and other daily necessities through a convenient and excellent shopping experience supported by an extensive self-operated frontline fulfillment grid [emphasis added].” Critically, Dingdong differentiates itself from its competitors by claiming to “procure… products primarily form direct upstream sources such as farms and cooperatives,” “apply stringent quality control across [its] entire supply chain to ensure product quality to [its] users,” and rely on its “frontline fulfillment grid and robust, digitalized fulfillment capabilities… [to] deliver… orders within 30 minutes [emphasis added].”
Unbeknownst to prospective investors, however, the Registration Statement misrepresented Dingdong’s commitment to ensuring the safety and quality of the food it distributes to the market. In fact, Dingdong was actively flouting its food safety responsibilities, selling, for example, dead fish to customers while marketing it as live fish and recycling vegetables that were past their sell-by date. In other words, Dingdong was no better at providing or assuring access to “fresh” groceries than the supermarkets, traditional Chinese wet markets, or traditional e-commerce platforms it repeatedly claimed to be displacing. The foregoing conduct subjected Dingdong to increased risk of regulatory and/or governmental scrutiny and enforcement, all of which, once revealed, were likely to (and did) negatively impact Dingdong’s business, operations, and reputation. By omitting these facts, ADS purchasers were unable to adequately assess the value of the shares offered in connection with the IPO, and thus purchased their ADS without material information and to their detriment.
According to the Complaint, the Company’s public statements throughout the IPO period were false and materially misleading. When the market learned the truth about Dingdong, investors suffered damages.
For more information on the Dingdong class action go to: https://bespc.com/cases/DDL
Stitch Fix, Inc. (NASDAQ: SFIX)
Class Period: December 8, 2020 – March 8, 2022
Lead Plaintiff Deadline: October 25, 2022
Stitch Fix sells a range of apparel, shoes, and accessories through its website and mobile application. Traditionally, Stitch Fix sold products as a "Fix," through which the customer would receive a monthly box of items chosen by a personal stylist. The customer would not know specifically which items they were receiving but would have the option to return whichever items it did not want. The customer paid a $20 "styling fee" per Fix, and that fee would be applied to any of the items the customer chose to buy.
Prior to the Class Period, in 2019, Stitch Fix announced a new direct-buy retail component, eventually named "Freestyle." The Freestyle program allowed customers to shop the site for specific products, giving the customer more control over what items they received, but also removing the curation element that differentiated Stitch Fix from other e-retailers. The Freestyle program was first made available to a subset of existing Stitch Fix customers in 2020, and incrementally rolled out to all existing customers in early 2021. In September 2021, the Freestyle program was formally launched to new customers.
On December 7, 2021, Stitch Fix announced a loss for its first quarter of 2022, cut its full-year revenue projections, and admitted, for the first time, that, as a result of the "expansion into Freestyle," the Company "may experience short-term impacts of cannibalization." As a result of these disclosures, Stitch Fix's share price declined by $5.97 per share, or 24%, from a closing price of $24.97 per share on December 7, 2021, to a closing price of $19.00 per share on December 8, 2021. However, Stitch Fix continued to assure investors that this was a short-term problem.
Then, on March 8, 2022, when Stitch Fix reported earnings for its second quarter of 2022, the Company offered a weak outlook for its third quarter of 2022 and cut its guidance for the full year. Stitch Fix attributed the guidance cut to "friction" between the Freestyle and Fix businesses.
As a result of this disclosure, the price of Stitch Fix stock declined by $0.67 per share, or 6%, from $11.01 per share to $10.34 per share.
The complaint alleges that, throughout the Class Period, Stitch Fix made numerous false and misleading statements to investors concerning the synergy between the Company's Fix and Freestyle programs, and repeatedly denied claims that the Freestyle program could cannibalize the Company's legacy Fix business. Specifically, Stitch Fix repeatedly assured investors that the Company's Freestyle business was "an additive experience" and "complimentary" to the Fix business, that "the combination of those two things will allow us to address many more types of clients," and that "we see solid growth in both sides of the business." In truth, throughout the Class Period, Stitch Fix concealed the fact that these programs were not complementary or additive. Stitch Fix knew that the Freestyle program would be much preferred to the Company's original Fix model, and that the Freestyle program would inevitably cannibalize the Company's legacy Fix business. As a result of these misrepresentations and omissions, Stitch Fix's Class A common stock traded at artificially inflated prices during the Class Period.
For more information on the Stitch Fix class action go to: https://bespc.com/cases/SFIX
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.