VNET Group, Inc. (NASDAQ: VNET) Securities Fraud Class Action

VNET investors may receive additional information about the case by clicking the link "Submit Your Information" above.  If you are a member of the class described below, you may no later than February 26, 2024 move the Court to serve as lead plaintiff of the class, if you so choose.

A class action lawsuit has been filed on behalf of those who purchased or acquired VNET Group, Inc. (“VNET”) (NASDAQ: VNET) securities between April 8, 2022 and February 15, 2023, both dates inclusive (the “Class Period”). 

Case Background:
On February 13, 2023, before the market opened, Bold Ally announced that GenTao had defaulted on the margin loan and Bold Ally would enforce the terms of the Facility Agreement by taking possession of 48,515,634 Class A ordinary shares (in the form of 8,085,939 American depositary shares (“ADSs”)) and 27,757,992 Class B ordinary shares of VNET that had been pledged as collateral.  On this news, the price of VNET ADSs declined $1.29 per ADS, over multiple trading sessions, or more than 20.4%, from a close of $6.31 per ADS on February 10, 2023, to close at $5.02 per ADS on February 14, 2023.

On February 15, 2023, before the market opened, VNET disclosed that the Board of Directors had approved and authorized the issuance of up to 555,000 newly created Class D ordinary shares to Defendant Sheng Chen, conditioned upon the conversion of his pledged Class B ordinary shares into Class A ordinary shares by any person not an affiliate of Defendant Sheng Chen.  These shares would be entitled to 500 votes per share on all matters submitted to shareholder vote in order to “protect the Company’s interests and continued stability.”  On this news, the price of VNET ADSs declined $0.10 per ADS, or more than 1.9%, from a close of $5.02 per ADS on February 14, 2023, to close at $4.92 per ADS on February 15, 2023.

The complaint 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 misrepresented and/or failed to disclose that: (1) GenTao was experiencing financial difficulties and was at risk of defaulting on the Facility Agreement; (2) as a result, there was a substantial likelihood that Bold Ally would acquire Defendant Sheng Chen’s significant ownership stake in VNET; (3) to restore Defendant Sheng Chen’s voting interest in VNET, the company would issue newly created shares to Defendant Sheng Chen, diluting investors’ interest; and (4) as a result of the foregoing, Defendants’ statements about the company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.