Investor Alert: Kaplan Fox Investigates Baidu, Inc. For Potential Securities Fraud
NEW YORK, May 1, 2020 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of Baidu, Inc. ("Baidu" or the "Company") (NASDAQ: BIDU). A complaint has been filed against the Company on behalf of investors that purchased Baidu securities, including Baidu American Depositary Receipts ("ADRs") between March 16, 2019 and April 7, 2020, inclusive (the "Class Period").
According to the complaint, Baidu is a technology company specializing in Internet-related services and products and artificial intelligence ("AI"). The Baidu search engine is allegedly the second largest search engine in the world and the most widely used search engine in the People's Republic of China ("PRC" or "China"), with a market share of more than 70%. The Company also provides a portfolio of apps that provide mobile device access to the Company's search and feed services, along with social media services and both user-generated and professionally produced media content.
At all relevant times, Baidu allegedly has generated a substantial majority of its revenues from online marketing services, whereby Baidu integrates paid advertisements from its customers into its online products and services, taking advantage of the Company's large user base and traffic. Accordingly, Baidu's revenues depend, in large part, upon offering products and services that are accessible to a large and engaged user base.
According to the complaint, over the past several years, Baidu has increasingly emphasized its feed services. The Company added a personalized news feed to its search app in 2016, meaning that users can now wait passively for Baidu algorithms to display content based on the user's past habits, rather than actively inputting search terms.
On April 7, 2020, post-market, China's internet regulator, the Cyberspace Administration of China ("CAC"), ordered Baidu to clean up improper information and halt the spread of "low-brow content." Specifically, the CAC stated that search engine Baidu's content review on some of its news feed channels is not "strict," "exerted bad influence to the society," and violated relevant Chinese laws and regulations.
Following this news, the price of Baidu's ADRs price fell $4.46 per share, or 4.38%, to close at $97.33 per share on April 8, 2020.
Then, on April 9, 2020, Baidu issued a statement entitled "Baidu Takes Measures to Comply with Government Directives," confirming that it had "suspended updating its content on certain newsfeeds channels within Baidu App and conduct maintenance, beginning from April 8, 2020" and stating that it "expects that the suspension may have impacted on the marketing services revenue related to the suspended channels."
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Baidu's feed services were not in compliance with applicable Chinese standards; (ii) the foregoing noncompliance subjected the Company to a heightened risk of regulatory enforcement, including the removal or suspension of certain of Baidu's services and products; (iii) accordingly, the Company's revenues derived from online marketing services were unlikely to be sustainable; and (iv) as a result, the Company's public statements were materially false and misleading at all relevant times.
If you are a member of the proposed Class, you may move the court no later than June 22, 2020 to serve as a lead plaintiff for the purported class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to discuss the complaint or our investigation, please contact us by emailing [email protected] or by calling 646-315-9003.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com. If you have any questions about this Notice, your rights, or your interests, please contact:
Donald R. Hall
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(646) 315-9003
E-mail: [email protected]
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
1999 Harrison Street, Suite 1560
Oakland, California 94612
(415) 772-4704
Fax: (415) 772-4707
E-mail: [email protected]
SOURCE Kaplan Fox & Kilsheimer LLP
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