WEBTOON is currently considering a possible class action lawsuit over alleged securities fraud by several major U.S. law firms. The platform is the largest webcomics site in the world, with more than 160 million monthly active users.
Via PR newswireseveral law firms are positioning themselves to be the ones to sue WEBTOON for alleged securities fraud after its IPO on June 27, 2024. The company raised more than $300 million by selling 15 million shares of common stock at $21 . Major banking firms were optimistic about the stock’s growth, including Goldman Sachs, which touted a price target of $62, and more moderate targets like Morgan Stanley ($23), Deutsche Bank ($25) and JP Morgan ( $23), all of whom collaborated with WEBTOON. on the IPO. However, following WEBTOON’s second quarter results in August, the stock quickly fell, currently sitting around $11.50, almost exactly half of its initial value. Several law firms are now alleging securities fraud, claiming that WEBTOON’s IPO disclosure statement contained false and omitted information that, had investors known, could have changed their decision to invest .
Several American law firms prepare to sue WEBTOON for “false and misleading” information
A statement from law firm Robbins Geller Rudman & Dowd claims that “the IPO registration statement was materially false and misleading and failed to state that: (1) WEBTOON experienced a deceleration in revenue growth advertising revenue. [declined 3.6%]; (2) WEBTOON experienced a deceleration in revenues from IP adaptations [declined 3.7%]; and (3) WEBTOON was exposed to weaker foreign currencies, which offset revenue growth. » WEBTOON’s revenue rose 0.1% — lower than some analysts had expected — and suffered a net loss of $76.6 million, which it attributes to “one-liner costs.” stock market and stock-based compensation expenses.
Law firms, including Robbins Geller Rudman & Dowd, Glancy Prongay & Murray And Levi and Korsinskycome forward to represent aggrieved investors. Each of their related press releases requests that someone designate themselves as the lead plaintiff, who will act on behalf of all plaintiffs seeking compensation from WEBTOON for the alleged fraud. Deadline ends November 4, 2024.
Many commenters have given reasons for WEBTOON’s slowdown, with some pointing to continued trends, as well as the oversaturation of the platform and support for the same types of stories. This is not unique to WEBTOON, with Ghost in the Shell: Get Up Director Kazuchika Kise laments the anime industry’s tendency to simply adapt isekai stories. RPG-inspired fantasy action stories like those from D&C Webtoon Biz Solo Upgrade and villain reincarnation titles undermine many of the new webcomics. Alongside the revelation of an upcoming Solo Upgrade live-action last year, Wangho Lee, COO and Director of D&C, said: “Today, we have 10 titles currently released with the word ‘villainy’ and they are all bestsellers. But only 2 with the expression ‘level up’ We believe that the “Level up” trend is coming to an end. WEBTOON still has other levers to improve the performance of its actions, in particular the increasing volume of adaptations. anime, its popular LINE MANGA service in Japan, and upcoming live-action film and television adaptations.
Source: PR newswire