According to the law firm press release, AirMedia operates out-of-home advertising platforms primarily in the People’s Republic of China, including a network of digital TV screens on airplanes; traditional media in airports, such as light boxes, billboards, and painted advertisements; and gas station media displays, as well as other outdoor media displays outside of the air-travel advertising sector.
The complaint alleges that during the Class Period, defendants made false and misleading statements regarding the purported sale of a 5% interest in AirMedia’s advertising subsidiary, AirMedia Group Co., Ltd. (“AM Advertising”), to Shenzhen Liantronics Co. Ltd. (“Liantronics”), and the valuation of the subsidiary negotiated in the deal. AirMedia’s press release announcing the sale stated that the deal “reflected the total valuation of AM Advertising of RMB3 billion,” or $500 million. The complaint alleges that defendants made additional statements during the Class Period claiming that RMB3 billion/$500 million was a solid valuation of the AM Advertising subsidiary. As a result of defendants’ false and misleading statements during the Class Period, AirMedia ADRs traded at artificially inflated prices, reaching a high price of $7.70 per ADR in intraday trading on June 15, 2015.
Later on June 15, 2015, the Company issued a press release announcing that it had entered into a definitive agreement to sell a 75% equity interest in AM Advertising to Beijing Longde Wenchuang Fund Management Co., Ltd. (“Longde”) for RMB2.1 billion/$344.4 million, significantly less than the purported value the Company had claimed the subsidiary was worth during the Class Period. On this news, the price of AirMedia ADRs fell more than 50% over the next two days.
An amended Complaint was filed on January 15, 2016. Defendant filed a Motion to Dismiss the amended Complaint on March 10. On March 27, 2017, the Court issued an Order granting Defendant's Motion to Dismiss with prejudice.