SAN DIEGO, Sept. 10, 2024 (GLOBE NEWSWIRE) — A class action lawsuit has been filed on behalf of purchasers or acquirers of WEBTOON Entertainment Inc. (NASDAQ: WBTN) (“Webtoon” or the “Company”) common stock pursuant and/or traceable to the Company’s registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with its June 2024 initial public offering (“IPO”). Plaintiff pursues claims under the Securities Act of 1933.
Webtoon investors have until November 4, 2024 to seek appointment as lead plaintiff of the Webtoon class action lawsuit.
If you purchased Webtoon common stock and suffered substantial losses, and you wish to obtain additional information or serve as lead plaintiff in this lawsuit, you may submit your information and contact us here: https://dicellolevitt.com/securities/webtoon/.
You can also contact DiCello Levitt attorneys Brian O’Mara or Hani Farah by calling (888) 287-9005 or emailing investors@dicellolevitt.com. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice.
Case Allegations
Webtoon is an entertainment company focused on mobile webcomics and visual storytelling.
On June 27, 2024, Webtoon conducted its IPO, selling 16,371,549 shares of the Company’s common stock at $21.00 per share.
As alleged in the Webtoon complaint, on August 8, 2024, just six weeks after the Company completed its IPO, Webtoon announced its financial results for second quarter 2024, which had ended just days after the IPO closed. The Company reported revenue of $321 million, which represented total revenue growth of only 0.1%. Webtoon further revealed that advertising revenue and IP Adaptations revenue declined by 3.6% and 3.7%, respectively. The Company revealed that any revenue and revenue growth had been “offset by the Company’s significant exposure to weaker foreign currencies.” Webtoon also reported a quarterly net loss of $76.6 million, or 70 cents.
On this news, Webtoon’s stock plummeted 38.2%, falling $7.88 to close at $12.75 per share on August 9, 2024, on unusually heavy trading volume. By the commencement of the Webtoon lawsuit, Webtoon common stock traded as low as $12.45 per share, a more than 40% decline from the $21.00 per share IPO price.
The Webtoon complaint alleges that the Registration Statement contained materially false and misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Webtoon complaint alleges that Defendants failed to disclose to investors that: (1) the Company experienced a deceleration in advertising revenue growth; (2) the Company experienced a deceleration in IP Adaptations revenue; (3) the Company experienced exposure to weaker foreign currencies which offset revenue growth; and (4) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and lacked a reasonable basis.
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