SAN FRANCISCO–(BUSINESS WIRE)–$RAAS #Cloopen–The law firm of Lieff Cabraser Heimann & Bernstein, LLP announces that class action litigation has been filed on behalf of investors who purchased or otherwise acquired the securities of Cloopen Group Holding Limited (“Cloopen” or the “Company”) (NYSE: RAAS) between February 9, 2021 and May 10, 2021, inclusive (the “Class Period) and/or pursuant and/or traceable to the registration statement and prospectus (collectively “Registration Statement”) issued in connection with the Company’s February 2021 initial public offering (“IPO”) of American Depositary Shares (“ADS”).
If you purchased or otherwise acquired Cloopen securities during the Class Period or in the IPO, you may move the Court for appointment as lead plaintiff by no later than February 8, 2022. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. Your share of any recovery in the actions will not be affected by your decision of whether to seek appointment as lead plaintiff. You may retain Lieff Cabraser, or other attorneys, as your counsel in the action.
Cloopen investors who wish to learn more about the litigation and how to seek appointment as lead plaintiff should click here, or email firstname.lastname@example.org, or call Sharon M. Lee of Lieff Cabraser at 1-800-541-7358.
Background on the Cloopen Securities Class Litigation
Cloopen, incorporated and headquartered in China, claims to be the largest multi-capability cloud-based communications solution provider in China.
The action alleges (1) that the Registration Statement misrepresented that the Company’s growth strategy was effective while failing to disclose that Cloopen was losing many of its existing customers; (2) that the Registration Statement failed to disclose that an increasing number of Cloopen’s customers refused to pay, resulting in record large increases in Cloopen’s accounts receivables and allowance for doubtful accounts; and (3) that the Registration Statement failed to disclose that Cloopen was burdened by massive liabilities connected with the fair value of certain recently-granted warrants.
On March 26, 2021, approximately six weeks after Cloopen’s IPO, the Company reported disappointing fourth quarter of 2020 revenues of only $39.6 million, $2 million less than analysts’ consensus estimates, net losses of $46.8 million, a 466.9% increase year-over-year, and operating expenses of $27.6 million, an increase in 30% compared to the fourth quarter of 2019. Cloopen stated that its net losses were due to a “change in fair value of warrant liabilities of . . . US$34.4 million” and attributed its 59.2% increase in general and administrative expenses to “an increase in the provision for doubtful accounts resulting from increased accounts receivables.” On this news, the price of Cloopen’s ADS fell $2.67, or 18.5%, from its closing price of $14.42 on March 25, 2021, to close at $11.75 per ADS on March 26, 2021, on elevated trading volume.
On May 10, 2021, after the market closed, Cloopen disclosed that its dollar-based net customer retention rate for solutions offered on a recurring basis had fallen from 102.7% in 2019 to 86.8% by the end of 2020, and that the fair value of the Series F Redeemable Convertible Preferred Shares underlying the Company’s Series F warrant, issued and exercised before the IPO, was $5.50 per share as of December 31, 2020. Following this news, the price of Cloopen’s ADS fell 6.47% from its closing price of $9.59 of on May 10, 2021, to close at $8.97 per ADS on May 12, 2021.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP, with offices in San Francisco, New York, and Nashville, is a nationally recognized law firm committed to advancing the rights of investors and promoting corporate responsibility.
The National Law Journal has recognized Lieff Cabraser as one of the nation’s top plaintiffs’ law firms for fourteen years. In compiling the list, the National Law Journal examines recent verdicts and settlements and looked for firms “representing the best qualities of the plaintiffs’ bar and that demonstrated unusual dedication and creativity.” Law360 has selected Lieff Cabraser as one of the Top 50 law firms nationwide for litigation, highlighting our firm’s “laser focus” and noting that our firm routinely finds itself “facing off against some of the largest and strongest defense law firms in the world.” Benchmark Litigation has named Lieff Cabraser one of the “Top 10 Plaintiffs’ Firms in America.”
For more information about Lieff Cabraser and the firm’s representation of investors, please visit https://www.lieffcabraser.com/.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Source/Contact for Media Inquiries Only
Sharon M. Lee
Lieff Cabraser Heimann & Bernstein, LLP