NEW YORK, Jan. 30, 2019 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Sogou Inc. ("Sogou" or the "Company") (NYSE: SOGO) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and indexed under 19-cv-00230, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise acquired Sogou American Depository Shares ("ADSs") pursuant and/or traceable to Sogou's Registration Statement and Prospectus issued in connection with the Company's initial public offering on November 9, 2017 (the "IPO" or the "Offering"), seeking to recover compensable damages caused by defendants' Securities Act of 1933 (the "Securities Act") violations (the "Class").
If you are a shareholder who purchased Sogou ADSs pursuant or traceable to the Company's registration statement and prospectus, you have until March 11, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Sogou, an Internet search company, was incorporated in the Cayman Islands in December 2005 by Sohu, Inc. ("Sohu"). Sogou is a subsidiary of Sohu and is based in Beijing, the People's Republic of China.
Sogou filed a draft Registration Statement on Form DRS with the Securities and Exchange Commission ("SEC") on August 14, 2017, and filed a Registration Statement on Form F-1 with the SEC on October 13, 2017. The SEC declared the Registration Statement effective on November 8, 2017, after Sogou made several amendments to the Registration Statement per comments received from the SEC. The Registration Statement was utilized in the Offering, and each of the Individual Defendants signed the Registration Statement.
On November 9, 2017, Sogou declared its IPO of 45,000,000 ADSs at a price of US$13 per ADS. Each ADS represents one Class A Ordinary Share, par value of $0.001 per share. Sogou announced that its ADSs were approved to be listed on New York Stock Exchange LLC ("NYSE") under the ticker symbol "SOGO."
The complaint alleges that 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) Chinese regulators were analyzing Sogou for regulatory action because of an increase in Sogou merchants' sales of counterfeit goods; (ii) Chinese regulators were analyzing Sogou for regulatory action because Sogou's existing software, advertising procedures, personnel, and audit procedures were insufficient to safeguard against compliance violations with governing Chinese regulations, and would need to be updated, enhanced, and strengthened, thus resulting in increased expenses; (iii) Sogou's cost of revenues were skyrocketing primarily because of significant increases in Traffic Acquisition Cost, which is a primary driver of Sogou's cost of revenues, as Sogou was dealing with significant price inflation from increased competition; (iv) Sogou was going to alter its strategy concerning smart hardware and push the Company's AI capabilities to increase product competitiveness; (v) as a result of altering its smart hardware strategy, Sogou had already decided to phase out non-AI-enabled hardware products, such as legacy models of Teemo Smart Watch, and transition to use products integrating AI technologies, which Sogou hoped would reduce its hardware revenues in the second half of 2018; and (vi) as a result of the foregoing, Sogou's public statements were materially false and misleading at all relevant times.
In June and July 2018, Chinese media sources reported that Chinese authorities had ordered Sogou to remove illegal content from its search engine.
On July 30, 2018, Sogou announced its financial and operating results for the second quarter of 2018. The Company revised guidance for its third quarter 2018 financial results, citing an investigation by Chinese regulatory authorities and the implementation of "remedial measures", which included a ten-day suspension of part of its advertising business.
Following this announcement, the price of Sogou ADSs fell $0.78, or 7.55%, to close at $9.55 on July 30, 2018.
On October 25, 2018, Sogou announced its financial and operating results for the third quarter of 2018, advising investors that revenues had fallen short of guidance by $5.24 million and disclosing disappointing guidance for 2019.
Following this news, the price of Sogou ADSs fell $0.25, or 4.35%, over the following three trading sessions, closing at $5.50 on October 30, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 9980
SOURCE Pomerantz LLP