Cision PR Newswire
SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment iQIYI, Inc. and against Goldman Sachs Group Inc. and Morgan Stanley of Class Action Lawsuit and Upcoming Deadline - GS; MS
News provided byPomerantz LLP
Jan 17, 2022, 9:01 PM ET
NEW YORK, Jan. 17, 2022 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Goldman Sachs Group Inc. and Morgan Stanley (together, "Defendants") on behalf of investors in iQIYI, Inc. ("iQIYI" or the "Company") (NASDAQ: IQ). The class action, filed in the United States District Court for the Southern District of New York, and docketed under 21-cv-10999, is on behalf of all those investors who purchased or otherwise acquired iQIYI shares contemporaneously with Defendants' unlawful trades from March 22, 2021 through and including March 29, 2021 (the "Class Period"), pursuant to Sections 20A, 10(b), and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §§ 78t-1, 78j(b), and 78t(a).
If you are a shareholder who purchased iQIYI shares during the Class Period, you have until January 31, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Archegos Capital Management ("Archegos"), a family office investment fund, was founded and run by Sung Kook Hwang ("Hwang"), a former portfolio manager of Tiger Asia Management, a hedge fund he also founded.
Goldman Sachs and Morgan Stanley are global financial services institutions that served as two of Archegos' prime brokers, helping it make trades and lending it capital in the form of margin lending.
Archegos took big, concentrated positions in companies such as ViacomCBS Inc. ("ViacomCBS"), Vipshop Holdings Ltd., Discovery Inc., Farfetch Ltd., Gaotu Techedu, Inc., Baidu Inc., iQIYI, and Tencent Holdings Ltd. through financial instruments called "total return swaps," whereby the underlying securities are held by banks that broker the investments.
Unbeknownst to investors and regulators, several large brokerage banks, including Defendants, each had simultaneously allowed Archegos to take on billions of dollars of exposure to volatile equities through swaps contracts, dramatically elevating the risk posed by these concentrated positions.
On March 23, 2021 ViacomCBS announced a new $3 billion offering to help fund investments in its streaming service, Paramount+, which had launched earlier in the month.
On March 25, 2021, one of Wall Street's most influential research firms, MoffettNathanson, published a report questioning ViacomCBS's value, downgrading the stock to a "sell," and setting a price target of only $55 per share, compared to the company's $85 offer. "We never, ever thought we would see Viacom[CBS] trading close to $100 per share," read the report. "Obviously, neither did ViacomCBS's management," it continued, citing the new stock offering.
In the wake of that report, ViacomCBS's stock cratered, losing more than half its value in less than a week. Indeed, by the close of trading on Friday, March 26, 2021, ViacomCBS was worth $48 per share.
This proved to be extremely problematic for Archegos, which had traded ViacomCBS on margin. Because Archegos had to maintain a certain amount of collateral to satisfy its lenders, and since the value of ViacomCBS stock drastically declined, Archegos needed enough collateral to cover, or else a margin call (where the lender can force a sell-off of the stock to bring the investor back into compliance with margin requirements), could be triggered.
On March 27, 2021, it was reported that Archegos failed to cover and, as a result, had to liquidate more than $20 billion of its leveraged equity positions on Friday, March 26, 2021.
The complaint alleges that, throughout the Class Period, Defendants sold a large number of iQIYI shares during the week of March 22, 2021, while in possession of material, non-public information. According to subsequent media reports, Defendants unloaded large block trades consisting of shares of Archegos' doomed bets, including billions worth of iQIYI securities, late Thursday, March 25, 2021, before the Archegos story reached the public, sending iQIYI's shares into a complete tailspin.
As a result of these sales, Defendants avoided billions in losses combined.
Defendants knew, or were reckless in not knowing, that they were prohibited from trading based on this confidential market-moving information, but traded anyway, disposing to Plaintiff and other members of the Class their iQIYI shares before the news about Archegos was announced and iQIYI's shares plummeted.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980
View original content to download multimedia:https://www.prnewswire.com/news-releases/shareholder-alert--pomerantz-law-firm-reminds-shareholders-with-losses-on-their-investment-iqiyi-inc-and-against-goldman-sachs-group-inc-and-morgan-stanley-of-class-action-lawsuit-and-upcoming-deadline--gs-ms-301461690.html
SOURCE Pomerantz LLP