Summary of Case:
A securities class action has been filed against Noah Education Holdings, Ltd. (Ticker: NED) ("Noah Education" or the "Company") on behalf of all securities purchasers from October 19, 2007 through November 19, 2007 (Class Period) in the United States District Court for the Southern District of New York.
The complaint alleges that on or about September 24, 2007, Noah Education filed a Form F-1 Registration Statement (the "Registration Statement") with the SEC for the Company's initial public offering on or about October 19, 2007 ("IPO" or the "Offering"). On or about October 18, 2007, the Prospectus with respect to the Offering (the "Prospectus"), which forms part of the Registration Statement, became effective and more than 9.8 million shares of Noah Education's American Depositary Shares ("ADSs") were sold to the public at $14.00 per ADS, thereby raising more than $137 million. The complaint alleges that the Registration Statement and Prospectus failed to disclose that the Company was experiencing an increase in raw materials costs which had negatively impacted its earnings.
On November 19, 2007, Noah Education issued a press release announcing its financial results for the quarter ended September 30, 2007. Among other things, the Company reported that its gross profit margins had dramatically declined from 59.4% in the same period the prior year to 50.2% in the quarter. The press release attributed the declining margins to "an increase in the purchasing cost of certain raw material components of DLDs such as flash chips and memory boards, during July and August." In response to this news, the price of Noah Education ADSs dropped from $12.46 per ADS to $6.72 per ADS on extremely heavy trading volume.
