According to the complaint, BlueCity conducted its IPO on July 8, 2020, issuing 5.3 million shares of the Company’s American depository shares (“ADSs”) at $16.00 per share. The Offering Documents prepared in connection with the IPO purportedly contained untrue statements of material fact and were not prepared in accordance with applicable rules. Specifically, the Offering Documents represented that BlueCity has “invested significant resources to … ensure the sustainable growth of [its] platform,” that the Company has “a highly-scalable, cloud-based technology infrastructure to ensure the sustainable growth of [its] platform,” and that “[t]alent development is fundamental to [BlueCity’s] sustainable growth.”
These statements were false or misleading and failed to disclose that: (i) defendants had overstated BlueCity’s business and financial prospects; (ii) the Company was ill-equipped to absorb the costs of becoming a publicly traded company, including IPO- and growth-related costs; and (iii) therefore, defendants had misrepresented the Company’s capability for sustainable growth.
On December 2, 2020, BlueCity announced its unaudited financial and operating results for the third quarter of the Company’s fiscal year 2020. BlueCity reported that the Company’s cost of revenues had increased 41.3% year-over-year, selling and marketing expenses had increased 86.3% year-over-year, technology and development expenses had increased 49.5% year-over-year, and general and administrative expenses had increased 4349% year-over-year. BlueCity attributed these increased costs to the growth of revenue-sharing costs, expenses related to the IPO, and increased advertising and promotion expenses and staff costs, among other things. On this news, the price of BlueCity ADSs fell $3.30 per share, or almost 23%, to close at $11.15 per ADS on December 2, 2020.
Then, on March 23, 2021, BlueCity announced its results for the fourth quarter 2020. BlueCity announced revenue of $42.7 million, which missed consensus estimates by $3.92 million. The Company also reported that its cost of revenues had increased 29% year-over-year, selling and marketing expenses increased 56.7% year-over-year, technology and development expenses increased 9.0% year-over-year, and general and administrative expenses had increased 345.5% year-over-year. On this news, BlueCity ADSs fell $3.25 per share, or almost 27%, over the following two trading sessions, to close at $8.92 per ADS on March 24, 2021.
BlueCity Investors Urged to Contact the Firm
If you purchased shares of BlueCity Holdings Limited American depository shares, have information, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Timothy L. Miles, Esquire, at 615-587-7384, Toll-Free at 855-846-6529, or by email to firstname.lastname@example.org. If you inquire by email please include your mailing address, telephone number, and the number shares owned.
About Timothy L. Miles
Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Last year, Mr Miles was recognized as a 2020 Top Ranked Lawyer; 2020 Top Rated Litigator; and a 2020 Elite Lawyer of The South by Martindale-Hubbell® and ALM. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association, a superb rated attorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019). Awards: Top Rated Litigator by Martindale-Hubbell® and ALM (2019-2021); Top Rated Lawyer by Martindale-Hubbell® and ALM (2019-2021); Elite Lawyer of The South by Martindale-Hubbell® and ALM (2019-2020); Member of the Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association (2017-2019); AV® Preeminent™ Rating by Martindale-Hubble® (2014-2020); PRR AV Preeminent Rating on Lawyers.com (2018-2020); The Top-Rated Lawyer in Litigation™ for Ethical Standards and Legal Ability (Martindale-Hubble® 2015); Lifetime Achievement Award by Premier Lawyers of America (2019); Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019-2020); Superb Rated Attorney (Avvo); Avvo Top Rated Lawyer for (Avvo 2017-2020). Mr. Miles has authored numerous publications advocating for shareholdings including most recently: Free Portfolio Monitoring Services Offered by Plaintiff Securities Firms Provides Significant Benefits to Investors (Timothy L. Miles, Dec. 3, 2019).
Timothy L. Miles, Esq.
Law Offices of Timothy L. Miles
141 Saundersville Road, #2202
Hendersonville, TN 37075
Leading the Fight to Protect Shareholder Rights for Over 19 Years