The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired RLX Technology Inc. American Depositary Shares (“ADSs” or “shares”) pursuant or traceable to the Registration Statement and Prospectus issued in connection with RLX’s January 2021 initial public offering (“IPO”). RLX investors have until August 9, 2021 to file a lead plaintiff motion.
RLX purports to be the “No. 1 branded e-vapor company in China,” which the Company claims is its “largest potential market.”
In January 2021, RLX conducted its IPO, selling approximately 116.5 million ADSs) at $12 per ADS, raising approximately $1.4 billion in gross proceeds.
On 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’s share price fell $9.31, or 48%, to close at $10.15 per share on March 22, 2021, thereby injuring investors.
Then, on June 2, 2021, the Company announced its first quarter 2021 financial results, reporting only a 48% increase in net revenues quarter over quarter, and second quarter guidance suggesting that its gross margin would “remain steady.”
On this news, RLX’s share price fell $0.97, or nearly 9%, to close at $9.90 per share on June 4, 2021, thereby damaging investors further. The Company’s shares have traded as low as $7.89 per ADS, or 32% below the IPO price.
The complaint alleges that Defendants overstated certain financial metrics and failed to disclose that these metrics were not indicative of future financial performance since regulators in China were already working on a national standard for e-cigarettes that would regulate them either under the same rules or in the same manner as ordinary cigarettes.
If you purchased RLX ADSs pursuant or traceable to the IPO, you may move the Court no later than August 9, 2021 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased RLX ADSs pursuant or traceable to the IPO, have information or 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 Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to firstname.lastname@example.org, or visit our website at www.frankcruzlaw.com.