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Evolution AB

Company NameEvolution AB
Stock SymbolEVVTY
Class PeriodFebruary 14, 2019 to October 25, 2023
Lead Plaintiff Motion DeadlineMarch 25, 2024

On January 24, 2022, Analyst Alpha Generation Limited released an analytical report stating that a significant portion of Evolutions revenue “could be at risk due to future regulatory clampdowns” and that Evolution was “exposed to revenues from . . . illegal gambling activities.” On this news, Evolution’s stock price fell $19.78, or 14.7%, to close at $115.00 per share on January 27, 2022, thereby injuring investors.

Then, on April 25, 2022, after market hours, the Australian gambling regulator announced that it had requested that Australian internet service providers block six online gambling sites, five of which were customers of Evolution, for engaging in illegal gambling. On this news, Evolution’s stock price fell $6.02, or 6.2%, to close at $90.71 per share on April 26, 2022.

Then, on May 4, 2022, reports revealed that the Swedish Administrative Court had upheld most of the record Swedish fines of approximately $17.8 million that had been imposed on brands operated by customers of Evolution in relation to breaches of Swedish online gambling regulations. On this news, Evolution’s stock price fell $12.34, or 10.9%, to close at $101.09 per share on May 5, 2022.

Then, on May 7, 2022, the press reported that industry participants had lobbied the UK government against an overhaul of gambling laws in the UK, revealing the potential threat of a UK gambling law overhaul. On this news, Evolution’s stock price fell $14.84, or 14.5%, over two consecutive trading days, to close at $87.25 per share on May 11, 2022.

Then, on April 27, 2023, Evolution released its first quarter 2023 financial results, revealing that its revenue from its RNG segment had experiences no growth, while the North American segment had experienced low growth. On this news, Evolution’s stock price fell $10.94 over consecutive trading days to close at $125.56 per share on May 2, 2023.

Then, on October 26, 2023, Evolution released its third quarter 2023 financial results, disclosing that the Company was facing delays in opening new studios and revealing, once more, no growth in revenue from either the RNG or North American segment. On this news, Evolution’s stock price fell $7.16, or 7.6%, to close at $86.79 per share on October 27, 2023, thereby injuring investors further.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that in “allowing play” from certain jurisdictions, multiple customers of Evolution’s were, or were deemed by regulators to be, unlicensed and/or in breach of the laws of those jurisdictions; (2) that Defendants misrepresented the extent of Evolution’s involvement with regulatorily non-compliant customers; and (3) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.

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