It is not an isolated case for Chinese concept stocks to encounter "class actions" in the United States. Before Yimindai, companies such as New Oriental and Ali had been sued one after another.
To put it bluntly, there are many unscrupulous people in the United States, and they are not convinced after losing money in the casino.
In addition, there are many law firms in the United States that are just making money, and there are law firms that focus exclusively on listed companies to make a fortune.
The law firm targeting Yimindai this time is Rosen Law Firm, a global investor rights protection law firm.
This law firm once sued Ahri, but the lawsuit ended up being dismissed.
The lawsuit against New Oriental ended with New Oriental settling out of court for US$4.75 million.
Anyway, there are losses and losses, and the goal is the word "wealth".
Rosen Law Firm announced that it is investigating a potential securities claim on behalf of investors in the Chinese Internet finance company Yimindai due to allegations that Yimindai released highly misleading business information to investors.
Rosen Law Firm also claimed that Yimindai acquiesced in the occurrence of fraud on its platform and deliberately used it to increase its operating income.
Then, the law firm published an advertisement in a local newspaper stating that it had filed a class action lawsuit against Yimin Dai and its executives on behalf of investors who purchased Yimin Dai stocks between March 11 last year and March 14 this year.
The reason is that Yimindai violated the U.S. federal Securities and Exchange Act by making false and misleading statements and failing to disclose relevant information.
The U.S. District Court for the Central District of California accepted the case.
As the news spread, Yimindai's stock price fell sharply again. As of the close of trading on the 15th, the stock price closed at US$9.23, with a market value of US$2.133 billion.
The stock price has fallen by 40% from the issue price of US$15.5.
Zhang Yida convened Yimindai's major shareholders to discuss a solution.
"Rosen Law Firm is a famous hyena. New Oriental was targeted by them once, and it finally cost them nearly US$5 million to settle."
When Xu Xiaoming talked about this incident, his face was full of disdain.
I don’t know whether he is disdainful of Dongfang Yu’s weakness or disdainful of Rosen Law Firm’s professional ethics.
Zhang Yida smiled coldly, "Reconciliation is impossible. I would rather spend $10 million to hire the top law firm than pay Rosen $1."
Shen Beipeng frowned. The two major incidents of "one-on-one student escape" and "class lawsuit" had a very serious impact on Yimindai's stock price.
Black Shirt Capital cashed out from two companies, Yimin Wangjin and Yimin Wealth, but Yimin Dai was the latest to go public, and it has only been on the market for a year now.
Once the six-month lifting period has passed, Black Shirt Capital has been reducing its holdings in large quantities, but so far it has only reduced its holdings by half.
Now when something like this happens, the reduction can only be suspended.
I don’t know how long it will take to return to the high market value of US$5 billion?
Thinking of this, Shen Beipeng felt like tearing up Rosen Law Firm.
Lenovo and Zhang Yida frantically reduced their holdings in the shares of three listed companies in Yimin Group last year. Shen Beipeng felt that this was too prescient.
Not only have we encountered these troubles this year, the attitude of regulatory agencies has been ambiguous. No one knows how long the Internet financial innovation road can last.
Shen Beipeng said: "I support it. I read Rosen Law Firm's reason for the lawsuit, and it's just a joke, a lame reason that I don't know where to find.
We cannot just be patient. The more patient you are, the more others will push you further.
If you settle with Rosen Law Firm, other law firms will come to your doorstep.
Should I give money or not at that time?"
Wang Jingbo from Gopher Assets sat aside and said nothing, with a sad look on her face. She felt that she had been on a pirate ship.
More than a year ago, it acquired a 2% stake in Yimindai for US$46.66 million. At that time, Yimindai was valued at US$2.333 billion.
Now that Yimindai is listed, Gopher Asset's 2% stake has been diluted, leaving only 1.73%.
Based on this year's closing price, this stake is worth US$36.9 million.
The loss was huge. Not to mention that more than a year was wasted, and the book loss was still nearly 10 million US dollars.
She now regrets that she did not follow Zhang Yida when she saw him reducing his holdings last year.
This is actually not her fault. Last year, one after another Internet financial companies went public, and everyone thought that the industry had finally ushered in a big explosion.
At that time, Wang Jingbo saw that Yimindai's financial report was so good and its growth rate was so gratifying. He thought that Yimindai was likely to surpass Miaofenfen and its market value would reach tens of billions of dollars.
But seeing the current situation, if you can lose less, you will consider it as a gain.
She glanced at Shen Beipeng lightly, her eyes full of resentment.
It was because of Shen Beipeng's help that she unfortunately invested in Yimin Loan.
In addition, Blackshirt Capital recommended Yimin Wangjin to her. Gopher Asset participated in the fixed increase of Yimin Wangjin at a price of US$49, spending US$245 million to buy 5 million ADS shares.
Now, the share price of Yimin Wangjin has dropped to around US$30. This investment alone has caused Gopher Asset's book loss to be nearly US$100 million.
At the moment, what troubles her most is whether to stop the loss immediately or wait for the stock price to rise.
She did not express any opinions. She felt that it was necessary to have a good chat with Zhang Yida after the meeting.
Shareholder representatives of CITIC Industrial Investment Fund and China Merchants also expressed their views and supported Yimin Dai in this lawsuit.
Their two institutions entered the market with a valuation of US$1.5 billion, and their books are still profitable, but they are not in a hurry.
Bank of America Merrill Lynch, Goldman Sachs, and Morgan Stanley entered the market in the same round as Gopher Asset.
However, it is an old investment bank after all, and its risk management is very good. It has already cashed out part of its stocks last year.
There is basically no loss on the books, but there is still a part of the equity that has not been fully cashed out.
Now when they encounter a Rosen law firm that is blocking their financial path, the three institutions are very angry.
Robert from Goldman Sachs spoke: "Mr. Zhang, I support you, notorious law firms like Rosen cannot let them taste any sweetness.
Wall Street is a place where the weak prey on the strong, and Yimindai must adopt a tough attitude."
Evans of Morgan Stanley was more direct. He said: "Morgan Stanley has several law firms that it has cooperated with for many years. They are all well-known large law firms in the United States and can be introduced to Yimin Loan Company."
Wang Zheng from Bank of America Merrill Lynch said with a smile: "Rosen Law Firm is a clown. With so many shareholders here, how can we still be afraid of him?"
Wang Zheng looked at Zhang Yida with a smile and said: "The headquarters of Bank of America Merrill Lynch has already spoken. If necessary, Yimindai can entrust Bank of America Merrill Lynch to fully represent the case.
A small matter is not worth diverting Mr. Zhang's energy."
Is Bank of America Merrill Lynch that good?
When Zhang Yida was thinking about the reason, Robert was the first to react, "Yes, it's just a small matter, Goldman Sachs can help solve it."
Evans smiled and said: "Leave it to Morgan Stanley. Within a week, we will give Mr. Zhang a perfect solution."
Shen Beipeng, Xu Xiaoming and others were thoughtful, "Aren't you really good at licking?"
Zhang Yida understood the intentions of the three people and the investment bank behind them. They were concerned about the qualifications of Ruixiang and Zhonghe as underwriters.
"Haha, the three of you are really enthusiastic!"
Zhang Yida smiled lightly and said, "Would this be too much trouble for you?"
"No trouble, no trouble."
Robert waved his hands repeatedly, "We are also shareholders, so we should do something for Yimindai."
The other two people also nodded and said nice things plausibly.
"Okay, then I'll leave it to you three! Yimindai will transfer the legal fees to you as much as you need."
Wang Zheng smiled and said: "What is money without money? There is no need to spend money on small things."
Robert and Evans looked at each other and saw the surprise in each other's eyes.
Immediately, the two of them nodded and said there was no need to spend money.
Seeing how enthusiastic they were, Zhang Yida simply gave them the task.
If you want to be qualified as an underwriter, you have to show off your muscles.