According to the law firm press release, the Complaint alleges that defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company had overstated its ability to monetize its user base and effectively integrate its distribution channels; (2) that, as a result, the Company had to lower its earnings guidance; and (3) that, as a result of the foregoing, the Company’s statements about its business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
On March 13, 2015, after the market closed, the Company lowered its revenue guidance for the fourth quarter of 2014 to be between USD $52.7 million and $53.0 million, as compared to the previously announced revenue guidance of between $62.9 million and $66.1 million. According to the Company, the revised guidance reflected the delay of a popular game, launched on one of the Company distribution platforms, and lower than expected revenues from another game being launched simultaneously as other hit games on the same distribution platform. On this news, ADS of iDreamSky declined $3.60 per share, over 33%, during to close on March 16, 2015 at $7.22 per share, on unusually heavy volume.
Plaintiff filed a consolidated complaint on March 25, 2016.
On February 22, 2017, the Court issued an Order granting in part and denying in part Defendants' motions to dismiss.