Missfresh Limited

In June 2021, Missfresh held its IPO, selling 21 million American Depository Shares (“ADSs”) at $13 per ADS.

On April 29, 2022, Missfresh disclosed that it could not timely file its fiscal 2021 annual report because it was conducting “an internal review of certain matters, including those relating to transactions between the Company and certain third-party enterprises.”

On this news, Missfresh’s stock fell 13%, to close at $0.448 per ADS on May 2, 2022, thereby injuring investors.

Then, on July 1, 2022, after the market closed. Missfresh announced that, based on substantial completion of the internal review, certain revenue reported during fiscal 2021 “may have been inaccurately recorded.” Specifically, the review identified “questionable transactions” carried out by the Next-Day Delivery Business Unit in 2021, including “undisclosed relationships between suppliers and customers, different customers or suppliers sharing the same contact information, and/or lack of supporting logistics information.”

Since the IPO, Missfresh’s ADSs have traded as low as $0.3075, representing a 97% decline from the IPO price.

The complaint filed in this class action alleges that 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 that: (1) Missfresh provided false financial figures in its Registration Statement; (2) Missfresh would need to amend its financial figures; (3) Missfresh, among other things, had lesser net revenues for the quarter ended March 31, 2021; and (4) 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.