CASES
Yahoo! Inc.
Class Period: Apr 19, 2011 to May 13, 2011
Lead Plaintiff Deadline: Aug 5, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against Yahoo! Inc. and certain of its officers and/or directors ("Yahoo" or the "Company) on behalf of all persons who purchased or otherwise acquired the common stock of Yahoo between April 19, 2011 and May 13, 2011, inclusive (the "Class Period"). This case has been filed in the United States District Court of Northern District of California.
The Complaint alleges as follows: During the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. Specifically, defendants failed to disclose that an important corporate asset in China had been transferred at much less than market value. As a result of defendants' false statements, Yahoo's stock traded at artificially inflated prices during the Class Period, reaching a high of SI 8.65 per share on May 6, 2011.
On May 10, 2011, Yahoo shareholders learned for the first time that the Company's $1 billion investment in a strategic partnership with Alibaba Group Holdings Limited ("Alibaba"), China's largest e-commerce company, likely had been severely impaired by the misappropriation of Alibaba's most valuable asset, Alipay, an e-commerce payment system, from Alibaba to another private company controlled by Alibaba's Chairman, Jack Ma.
On May 15, 2011, Yahoo issued a press release entitled "Joint Statement from Alibaba Group and Yahoo! Inc. Regarding Alipay," which stated in part: Yahoo! Inc. and Alibaba Group issued the following statement regarding Alipay: "Alibaba Group, and its major stockholders Yahoo! Inc. and Softbank Corporation, are engaged in and committed to productive negotiations to resolve the outstanding issues related to Alipay in a manner that serves the interests of all shareholders as soon as possible." On this news, Yahoo's stock collapsed $0.74 per share to close at $15.81 per share on May 16, 2011 - a decline of 15% from its Class Period high of $18.65 per share. According to news reports, Alibaba received only $46 million for Alipay's assets, which securities analysts valued at $5 billion.
The true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows:
(a) Yahoo management had been informed on March 31,2011, at the latest, that Alipay's structure had been shifted from Alibaba, reducing the value of Yahoo's investment in Alibaba by billions of dollars; and
(b) Chinese regulations regarding foreign ownership had been anticipated to change as far back as 2009, which would require Yahoo or Alibaba to divest themselves of Alipay, but Yahoo had failed to develop a strategy to recover the value it had in Alibaba.
As a result of defendants' false statements, Yahoo's stock traded at artificially inflated levels during the Class Period. However, after the above revelations seeped into the market, the Company's shares were hammered by massive sales, sending them down over 15% from their Class Period high.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.