Giant Interactive Group, Inc.
In re Giant Interactive Group, Inc. Securities Litigation, No. 07 Civ. 10588-RWS (S.D.N.Y.)
On June 30, 2008, the Honorable Robert W. Sweet of the United States District Court for the Southern District of New York appointed AF&T as Co-Lead Counsel in the securities class action filed on behalf of a class of investors who purchased or acquired the American Depositary Shares (“ADSs”) of Giant Interactive Group, Inc. (“Giant Interactive” or the “Company”) pursuant and/or traceable to the Company’s initial public offering on or about November 01, 2007, and were damaged thereby.
Giant Interactive develops and operates online games in the People’s Republic of China. The Company focuses on massively multiplayer online, or MMO, games that are played through networked game servers in which tens of thousands of players are able to simultaneously connect and interact. Among other financial metrics, Giant Interactive reports the number of average concurrent users (“ACU”) and peak concurrent users (“PCU”) for its games, which indicate the strength and popularity of its games and its future revenue stream.
On or about November 01, 2007, Giant Interactive effectuated its IPO and sold more than 57 milllion ADSs to the public, reaping proceeds of more than $886 million. Shortly thereafter, the Company announced that the underwriters had exercised their over-allotment option and purchased and sold an additional 8.6 million ADSs for a total amount raised of $1.2 billion. The Company’s IPO offering documents, however, misrepresented or omitted to disclose that the Company had implemented a significant rule change to ZT Online, the Company’s most popular game, and that as a result of that rule change the Company experienced a declining ACU and PCU in the 3Q07 as compared to 2Q07. These declining figures were released a mere twenty days after the IPO.
On October 06, 2008, Lead Plaintiffs filed a Consolidated Amended Complaint, which alleged violations of federal securities laws by Giant Interactive, and certain of the Company’s officers and directors. On August 7, 2009, the Court sustained the claims alleged in the Consolidated Amended Complaint. AF&T has commenced a complex and uniquely difficult global discovery effort in support of the class claims and allegations in this case, which includes analysis of document productions in Mandarin and recent witness depositions that took place in Hong Kong.