NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors that purchased RLX Technology, Inc. (NYSE: RLX) American Depositary Shares (“ADSs”) pursuant and/or traceable to the Company’s initial public offering conducted on or about January 22, 2021 (the “IPO” or “Offering”). Investors have until August 9, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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RLX Technology purports to be the “No. 1 branded e-vapor company in China,” which it also claims is its “largest potential market.” In January 2021, as part of RLX Technology’s IPO, defendants issued approximately 116.5 million ADS to the investing public at $12 per ADS, raising approximately $1.4 billion in gross proceeds.
The RLX Technology class action lawsuit alleges that the Registration Statement contained untrue statements of material fact and omitted to state material facts both required by governing regulations and necessary to make the statements made not misleading. Among other things, the RLX Technology class action lawsuit alleges that the Registration Statement misrepresented and omitted that RLX Technology knew (or had information making it foreseeable to know), at the time of the IPO, that China was working on a national standard for e-cigarettes that would bring them into line with regular cigarette regulations. The RLX Technology class action lawsuit further alleges that RLX Technology knew that its reported financials were not nearly as rosy as the Registration Statement made it seem, nor indicative of future results. By omitting these facts and, for example, representing that the risk of regulation was only a contingent possibility, the RLX Technology class action lawsuit alleges that investors were unable to adequately assess the value of the shares offered in connection with the IPO, and thus purchased their ADSs without material information and to their detriment.
On or about March 22, 2021, China’s Ministry of Industry and Information Technology posted draft regulations confirming that e-cigarettes and new tobacco products would be regulated similar to traditional tobacco offerings. On this news, RLX Technology’s ADS price declined nearly 48%.
Then, on June 2, 2021, RLX Technology published its first quarter 2021 financial results, revealing a mere 48% increase in net revenues quarter over quarter, and second quarter guidance suggesting that its gross margin would only “remain steady.” On this news, RLX Technology’s ADS price fell an additional 9%. By the commencement of this action, RLX Technology’s ADSs traded more than 32% below the IPO offering price.
If you purchased RLX ADSs pursuant and/or traceable to the IPO and suffered a loss, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at email@example.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.