Within the past week, four US shareholder rights litigation firms announced an investigation into claims against Chinese livestreaming platform Douyu. Among the firms are The Schall Law Firm, Robbins LLP, Johnson Fistel, and Scott+Scott Attorneys at Law LLP (“Scott+Scott”). The target of the investigations are claims against Douyu about potential violations of federal securities laws pursuant to its July 2019 IPO. DouYu’s IPO saw it’s ADS priced at $11.50. On March 3, 2020, Douyu’s ADS closed at $7.98, representing a loss of over 30.6%.
So far, the four law firms have not filed a formal lawsuit against Douyu, but have disclosed information collection channels and contact information for investors.
Douyu’s operations have not been affected by the announcements yet. After Robbins LLP and Schall announced the investigation, Douyu’s shares remained unaffected too, closing 2.31% up.
Since its listing on July 17, 2019, Douyu has reported revenue of 1.873 billion yuan and 1.859 billion yuan in the financial reports for 2019 Q2 and Q3 respectively. Its GAAP’s net profit was on a rollercoaster ride, with a net profit of $23.2 million in the second quarter but a net loss of $165.4 million in the third quarter.