Robbins Arroyo LLP: Jumei International Holding Limited (JMEI) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that an investor of Jumei International Holding Limited (NYSE: JMEI) has filed a federal securities fraud class action complaint in the U.S. District Court for the Eastern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between May 16, 2014 and November 20, 2014. Jumei is an online retail company based in China that sells beauty products and cosmetics.
Jumei Is Accused of Misleading Investors
According to the complaint, Jumei American Depository Shares (“ADS”) fell $2.91 per share, or 13%, to close at $19.32 per share on November 20, 2014, following the company’s November 19, 2014 third quarter earnings announcement. Specifically, Jumei reported that gross profits as a percentage of net revenues declined to 38% and gross profit as a percentage of total net gross merchandise value declined to 22%. According to Jumei, these decreases were primarily due to an increase in promotional activities, which led to relatively higher pricing discounts, as well as an increase in value added tax as a result of a shift from beauty product marketplace sales to merchandise sales.
The complaint also alleges that Jumei failed to disclose that: (i) it had made the decision to change its revenue model by transitioning from marketplace services to merchandise sales; (ii) the change in revenue structure posed a risk to the company’s financial performance; (iii) defendants knew they were going to undertake the transition away from the marketplace services at the time Jumei filed its registration documents with the Securities and Exchange Commission in connection with its Initial Public Offerings; and (iv) that defendants were aware that there were additional costs and expenses that would be incurred because of this transition.
Jumei Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.