NEW YORK, October 17, 2020 / PRNewswire / – Pomerantz LLP announces that a class action lawsuit has been filed against Baidu, Inc. (“Baidu” or the “Company”) (NASDAQ: BIDU) and certain of its officers. The class action, filed in United States District Court of the East District New York, and listed as 20-cv-04660, is in the name of a class consisting of all persons other than the Defendants who have purchased or otherwise acquired Baidu securities between April 8, 2016 and Aug 13, 2020, both dates included (the “course period”). Plaintiff seeks to recover compensable damages caused by defendants’ breaches of federal securities laws and to pursue remedies under Sections 10 (b) and 20 (a) of the Securities Exchange Act of 1934 (the ” exchange law ”) and the rule 10b-5 promulgated below.
If you are a shareholder who purchased Baidu securities during the course period, you have until October 19, 2020, to ask the Court to appoint you as the principal plaintiff in the class. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, Ext. 7980. Those inquiring by e-mail are encouraged to include their mailing address, phone number and number of shares purchased.
[Click here for information about joining the class action]
Baidu claims to provide internet search services China and internationally. It operates through two segments, one of which is iQIYI. The iQIYI segment provides online entertainment services, including original and licensed content, membership services, and online advertising services.
In November 2012, Baidu obtained the controlling interest in what was then called Qiyi.com, Inc. (now iQIYI, Inc.) (“iQIYI”). In early 2018, iQIYI proceeded to its initial public offering and was listed on the NASDAQ stock exchange. Baidu is still the majority owner of its iQIYI subsidiary.
The complaint alleges that throughout the period of the action, the defendants made materially false and misleading representations regarding the company’s business, operational and compliance policies. Specifically, the defendants have made false and / or misleading statements and / or failed to disclose that: (i) Baidu has distorted the financial and business position of iQIYI; (ii) iQIYI had inadequate controls; and (iii) therefore, the defendants’ public statements were materially false and / or misleading at all material times.
Sure May 16, 2019, outside of trading hours, Baidu issued a press release announcing its financial and operating results for the first quarter of fiscal 2019 (the “1Q19 press release”). This press release reported, among other results, that Baidu had recorded its first loss under GAAP (generally accepted accounting principles) for the first time in 15 years. Specifically, for the first quarter of 2019, Baidu reported an operating loss of 936 million RMB ($ 139 million), compared to an operating result of 4.6 billion RMB for the first quarter of 2018. Baidu attributed these results, in part, to the content costs of 6.2 billion RMB ($ 917 million), which is a 47% year-over-year increase, which the company said “primarily due to increased investment in iQIYI content.”
On the same day, also outside of market hours, Baidu held a conference call with investors and analysts to discuss the company’s first quarter 2019 results (the “1Q19 conference call”). During this appeal, defendant Yu explained that “Baidu’s total income reached CNY 24.1 billion, up 15%, or 21%, excluding income derived from CNY 1.1 billion,” But, “[a]t at the same time, [the Company] incurred a net loss of CNY 327 million Due to [inter alia] . . . increased loss of iQIYI, “noting that”[c]cost increased by 47% to CNY 6.2 billion, mainly due to iQIYI’s increased investment in content. “
Following 1Q19 Press Release and 1Q19 Conference Call, Baidu’s ADS Dropped $ 25.39 per share, or 16.52%, to close at $ 128.31 per share on May 17, 2019. Despite this decline in Baidu’s ADS price, the Company’s shares continued to trade at artificially inflated prices during the remainder of the Class Period due to the defendants’ persistent inaccuracies and omissions related to iQIYI.
For example, on March 13, 2020, Baidu filed with the SEC its annual report for the year ended December 31, 2019 on a Form 20-F signed by the defendant Y. Li (the “2019 20-F”). SOX certifications signed by defendants were attached to 20-F 2019 Y. Li and Yu attesting to the accuracy of financial information, the disclosure of any material change in the Company’s internal control over financial reporting and the disclosure of any fraud.
The Pomerantz firm, with offices in New York, Chicago, Los Angeles, and Paris is recognized as one of the leading companies in the areas of corporate, securities and antitrust litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz was a pioneer in the field of class actions in securities. Today, more than 80 years later, Pomerantz continues the tradition it established, fighting for the rights of victims of securities fraud, breach of fiduciary duty and professional misconduct. The firm has recovered numerous indemnities of several million dollars on behalf of the members of the group. See www.pomerantzlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980
SOURCE Pomerantz LLP