DouYu International Holdings Limited (DOYU) Subject to Increased Enforcement Measures
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired DouYu International Holdings Limited (NASDAQ: DOYU) securities between April 30, 2021 and May 9, 2023. DouYu purports to be “a leading game-centric live streaming platform in China and a pioneer in the eSports value chain.”
According to the complaint, during the class period, defendants made false and/or misleading statements and/or failed to disclose that: (1) the Chinese government, due to concerns about issues such as video game and computer addiction, as well as content challenging its authority, could become increasingly aggressive towards DouYu regardless of how effective or sincere its attempts to comply with Chinese law were; (2) this increasingly aggressive posture subjected DouYu to a heightened risk of an investigation and subsequent government enforcement action and ultimately resulted in enforcement action; and (3) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
As information about China’s plans to impose new restrictions on its live-streaming sector came to light, the price of DouYu ADSs declined, harming investors.
Then, on May 8, 2023, the CyberSpace Administration of China released a statement on its website entitled “The working group of the cyberspace department entered the Douyu platform.” This release stated, in full, “[i]in response to serious ecological problems such as pornography and vulgarity on the Douyu platform, on May 8, the State Internet Information Office instructed the Hubei Provincial Internet Information Office to send a working group to the Douyu platform to carry out a one-month centralized rectification supervision.” On this news, the Company’s share price fell over 9% on May 9, 2023.
What Now: Similarly situated shareholders may be eligible to participate in the class action against DouYu International Holdings Limited. Shareholders who want to act as lead plaintiff for the class must submit papers to the court by August 8, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
