ZTO Express (Cayman) Inc.
Robbins Arroyo LLP: ZTO Express (Cayman) Inc. (ZTO) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against ZTO Express (Cayman) Inc. (NYSE: ZTO). The complaint is brought on behalf of all purchasers of ZTO American Depository Shares (“ADSs”) pursuant to the company’s public offering (the “Offering”) on October 27, 2016, for alleged violations of the Securities Act of 1933 by ZTO’s officers and directors. ZTO, through its subsidiaries, provides express delivery and other value-added logistics services in China.
ZTO Accused of Exaggerating Its Profit Margins
According to the complaint, on October 27, 2016, ZTO held the Offering, selling 72,100,000 ADSs at a price of $19.50 per share, raising $1.4 billion. ZTO’s registration statement and prospectus filed with the U.S. Securities and Exchange Commission in support of the Offering presented a highly positive picture of the company’s business, performance, prospects, and acreage, while omitting crucial realities. The company specifically emphasized its strong operating leverage, superior profitability, and rapid growth. However, ZTO failed to disclose that it was improperly inflating its stated profit margins far above industry norms by keeping low-margin segments of its business out of its financial statements. Since the Offering, the price of ZTO’s ADSs has fallen approximately 25%.
ZTO Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, or you can complete the form below and we will contact you directly.