ATTENTION NASDAQ: VNET INVESTORS: Contact Berger Montague About a VNET Group, Inc. Class Action Lawsuit
PHILADELPHIA, Jan. 12, 2024 /PRNewswire/ -- Berger Montague advises investors that a securities fraud class action lawsuit has been filed against VNET Group, Inc. ("VNET") (NASDAQ: VNET) on behalf of purchasers of VNET securities between April 8, 2022 and February 15, 2023, inclusive (the "Class Period").
Investor Deadline: Investors who purchased or acquired VNET securities during the Class Period may, no later than February 26, 2024, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation, please contact Berger Montague: James Maro at [email protected] or (267) 637-3176, or Andrew Abramowitz at [email protected] or (215) 875-3015 or CLICK HERE.
VNET is a Beijing-based provider of private internet and data center services, such as hosting, cloud services, and virtual private networks.
In August 2021, VNET's co-founder, Josh Sheng Chen, and his companies entered into a $50.25 million margin loan facility with Bold Ally (Cayman) Limited ("Bold Ally"), pledging all of his shares in GenTao Capital Limited ("GenTao") and certain companies as collateral (the "Facility Agreement"). Defendant Sheng Chen, GenTao, and their affiliates beneficially owned approximately 78.52 million VNET shares.
On February 13, 2023, before the market opened, Bold Ally announced it would exercise its rights under the Facility Agreement following a default by GenTao and was entitled to 48,515,634 Class A ordinary shares and 27,757,992 Class B ordinary shares of the Company.
On this news, VNET's shares fell $0.20, or 3.2% on February 13, 2023, on unusually heavy trading volume. VNET's share price continued to decline by $1.09, or 17.8%, over the next consecutive trading session to close at $5.02 per share on February 14, 2023.
Then, on February 15, 2023, VNET disclosed that the board of directors had authorized the issuance of up to 555,000 newly created Class D ordinary shares to the Executive Chairman of the Board, and that these shares would be granted a 500-to-1 vote per share power. VNET stated this measure was required in order to "protect the [c]ompany's interests and continued stability."
On this news, VNET's share price fell $0.10, or 2%, to close at $4.92 per share on February 15, 2023, on unusually heavy trading volume.
The complaint alleges that throughout the Class Period, the defendants failed to disclose to investors that: (1) GenTao was experiencing financial difficulties and was at risk of defaulting on the Facility Agreement; (2) as a result, there was a substantial likelihood that Bold Ally would acquire Defendant Sheng Chen's significant ownership stake in VNET; and (3) to restore Defendant Sheng Chen's voting interest in VNET, the company would issue newly created shares to Defendant Sheng Chen, diluting investors' interest.
A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the Court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Berger Montague, with offices in Philadelphia, Minneapolis, Delaware, Washington, D.C., San Diego, San Francisco and Chicago, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for over five decades and serves as lead counsel in courts throughout the United States.
Contacts:
James Maro, Senior Counsel
Berger Montague
(267) 637-3176
[email protected]
Andrew Abramowitz, Senior Counsel
Berger Montague
(215) 875-3015
[email protected]
SOURCE Berger Montague
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