According to the lawsuit, defendants throughout the Class Period made materially false and misleading statements regarding the Company’s business and financial metrics. Specifically, Defendants made false and/or misleading statements regarding, and/or failed to disclose that the Company overstated its user metrics and revenue and, as a result, the Company’s public statements were materially false and misleading at all relevant times.
On May 19, 2021, Swan Street Research (“Swan Street”) published a report (the “Swan Street Report”) addressing Yalla, entitled “Is Yalla Group a Multi $B Fraud? The ‘Clubhouse of the Middle East’ UAE Tech Unicorn that Never Was.” The Swan Street Report alleged, among other things, that the Company has been inflating its financial metrics, including its user data and its revenue, and characterized Yalla’s financial statements as “not credible.” On this news, the price of Yalla shares fell $1.31 per share, or 7.15%, to close at $17.01 per share on May 19, 2021.
The next day, May 20, 2021, analyst The Bear Cave issued a report entitled, “Problems at Yalla Group,” and Gotham City Research also tweeted that it was shorting Yalla shares. On this news, the price of Yalla shares fell an additional 6% on May 20 to close at $15.96.
Then, on August 9, 2021, after the markets closed, Yalla issued a press release entitled, “Yalla Group Limited Announces Unaudited Second Quarter 2021 Financial Results,” announcing its financial results for the second quarter of 2021 (“2Q21 Results”). The 2Q21 Results disclosed that Yalla had quarterly revenue of $66.62 million, which did not meet analysts’ expectations. On this news, the price of Yalla shares fell nearly 18.9% on August 10, 2021, closing at $10.99, down from its previous close price of $13.55.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.
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