LOS ANGELES, Jan. 24, 2022 (GLOBE NEWSWIRE) -- Glancy Prongay & Murray LLP (“GPM”) reminds investors of the upcoming February 8, 2022 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired Cloopen Group Holding Limited (“Cloopen” or the “Company”) (NYSE: RAAS): (a) American Depositary Shares (“ADSs”) pursuant and/or traceable to the Company’s February 2021 initial public offering (“IPO” or the “Offering”); and/or (b) securities between February 9, 2021 and May 10, 2021, inclusive (the “Class Period”).
If you suffered a loss on your Cloopen investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at www.glancylaw.com/cases/cloopen-group-holding-limited/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com to learn more about your rights.
In February 2021, Cloopen conducted its IPO, selling 23 million ADSs at $16 per ADS.
On March 26, 2021, Cloopen released its 2020 fourth quarter financial results for the period ending December 31, 2020 – more than a month before the IPO. Cloopen reported revenues of $39.6 million, $2 million short of analysts’ consensus, as well as net losses of $46.8 million (a 466.9% year-over-year increase), and operating expenses of $27.6 million (a 30% year-over-year increase).
On this news, Cloopen’s shares fell $14.42, or 18.5%, to close at $11.75 per ADS on March 26, 2021.
On May 10, 2021, Cloopen filed its 2020 annual report, revealing that its dollar-based net customer retention rate for recurring solutions fell from 102.7% in 2019 to 86.8% in 2020, which meant that Cloopen’s purportedly “loyal” customer base was not “expand[ing]” into additional solutions and the Company’s growth strategy was not effective.
On this news, Cloopen’s shares closed at $8.97 per ADS on May 12, 2021. Since the IPO, Cloopen’s ADSs have traded as low as $2.70 per ADS, an 80% decline from the $16 IPO price.
The complaint filed in this class action alleges that the Registration Statement made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Cloopen’s “land and expand” strategy was failing and its customer base deteriorating; (2) the Company’s dollar-based net retention rate was not “stable,” but rather had dropped significantly by the end of 2020; (3) at the time of the IPO, an increasing number of customers were not paying Cloopen for the services and/or solutions it provided, forcing Cloopen to recognize massive increases in its accounts receivable and its allowance for doubtful accounts; (4) because Cloopen had valued certain warrants at extremely low levels, the Company would recognize massive additional costs associated with those warrants; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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If you purchased or otherwise acquired Cloopen ADSs during the Class Period, you may move the Court no later than February 8, 2022 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.
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Contacts
Glancy Prongay & Murray LLP, Los Angeles
Charles Linehan, 310-201-9150 or 888-773-9224
shareholders@glancylaw.com
www.glancylaw.com
