Publicly available records indicate that a class action lawsuit has been filed on behalf of investors in Cheetah Mobile (NYSE:CMCM) in connection to alleged violations of securities laws by CMCM. Fitapelli Kurta is interested in hearing from investors who have complaints regarding investments made in Cheetah Mobile between April 26, 2017 and November 27, 2018.
The class action complaint specifically alleges that during the period in question, CMCM might have provided false and/or misleading material information, and/or failed to disclose adverse material information to the public, chiefly: that the company’s apps contained features—which the company had not disclosed—which monitored when its users downloaded other apps; that the company employed the data gathered by these features to improperly assert that it had caused those downloads; that when these features were uncovered, they had the potential to result in the Cheetah Mobile’s apps being removed from the Google Play app store; and that consequently the revenues enjoyed by the company during the relevant period partially stemmed from inappropriate activities, and were thus not sustainable; and that consequently the company’s statements to the public during the relevant period were false and misleading. When BuzzFeed News issued a report on November 26, 2018 that a number of Cheetah Mobile applications contained features that tracked downloads of new apps and that the company “inappropriately claim[ed] credit for having cause this download,” the company’s stock value declined $3.32/share, or approximately 37%, over the following two days of trading, closing at $5.48/share on November 27, 2018. The complaint alleges that when true facts emerged, investors suffered losses.
According to the company’s website, Cheetah Mobile is “a leading mobile internet company dedicated to making the world smarter.” On November 26, 2018, BuzzFeed News reported that the research firm Kochava had uncovered a scheme in which “Eight apps with a total of more than 2 billion downloads in the Google Play store have been exploiting user permissions as part of an ad fraud scheme that could have stolen millions of dollars.” According to the report, seven of those eight apps were owned by Chetah Mobile; the other was owned by Kika Tech. According to the company, the scheme took advantage of a fee app developers pay, usually between 50 cents and three dollars, “to partners that help drive installations of new apps.” Kochava’s research found that the companies used a practice known as click flooding or click injection, which tracks users’ downloads of new apps and claims credit for the download, such that they would receive the fee for the installation “even when they played no role” in it. Following the story’s publication, two Cheetah Mobile apps, CM Locker and Batter Doctor, “were removed from the Google Play store,” according to BuzzFeed News.
A class action lawsuit has already been filed in connection with Cheetah Mobile. If you wish to serve as lead plaintiff in the CMCM lawsuit, you must move the Court no later than January 29, 2019. If you wish to join the litigation, please contact Marc Fitapelli at 212-658-1501 or Jonathan Kurta at 212-658-1502. There is no cost or obligation to you and your ability to share in any recovery does not require that you serve as a lead plaintiff.