Dingdong (Cayman) Limited
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District ofugust 25 New York on behalf of those who acquired Dingdong (Cayman) Ltd. (“Dingdong”) (NYSE: DDL) publicly traded securities between June 26, 2021 through August 25, 2022, inclusive (the “Class Period”). Investors have until October 24, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Dingdong is an e-commerce company that retails groceries and other merchandise.
On March 17, 2022, a Beijing News report was published stating that Chinese regulators launched a probe into Dingdong for food safety violations uncovered by the local news. According to the report, Dingdong replaced labels on expired vegetables and sold frozen fish products as fresh. On this news, the price of Dingdong ADS declined by $0.46 per ADS, or approximately 10.82%, from $4.25 per ADS to close at $3.79 on March 17, 2022. By the commencement of the Dingdong class action lawsuit, Dingdong shares traded as low as $2.51 per ADS, representing a decline of over 89% from the $23.50 IPO offering price.
The lawsuit alleges that throughout the Class Period, Defendants made materially false and misleading statements and/or failed to disclose that: the Registration Statement misrepresented Dingdong’s commitment to ensuring the safety and quality of the food it distributes to the market. Specifically, Dingdong was actively flouting its food safety responsibilities, selling, for example, dead fish to customers while marketing it as live fish and recycling vegetables that were past their sell-by date. In other words, Dingdong was no better at providing or assuring access to “fresh” groceries than the supermarkets, traditional Chinese wet markets, or traditional e-commerce platforms it repeatedly claimed to be displacing. This, in turn, subjected Dingdong to an increased risk of regulatory and/or governmental scrutiny and enforcement, all of which, once revealed, were likely to (and did) negatively impact Dingdong’s business, operations, and reputation.