GDS Holdings Limited ("GDS") is a Chinese company that designs, builds, and operates data centers. GDS offers colocation, managed hosting, and managed cloud services.

Plaintiff's law firm issued a press release on August 2, 2018, announcing the law suit. According to the press release, on July 31, 2018, Blue Orca Capital released a report alleging that "GDS is borrowing crippling amounts of debt to enrich insiders by acquiring data centers from undisclosed related parties which are not nearly as valuable as the Company claims. We believe that since becoming a public Company, GDS has borrowed recklessly to siphon off at least RMB 696 million to insiders by inflating the purchase price of undisclosed related party acquisitions."

Following this report, the Company's shares plunged more than 38%.

The Complaint alleges that between November 2, 2016 and July 31, 2018, inclusive (the "Class Period"), Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose that: (1) the Company has overstated its utilization and occupancy rates; (2) it has made acquisitions with related parties at inflated prices; (3) it has used suspect capital and debt raisings despite large off-shore cash reserves; (4) it has adopted unorthodox accounts receivable and payable practices; and (5) that, as a result of the foregoing, Defendant's statements about GDS' business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.

This case was voluntarily dismissed on October 3, 2018. A related case continues in the Eastern District of Texas.

On October 26, 2018, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on December 24. Defendants filed a Motion to Dismiss the amended Complaint, and alternatively, transfer venue on February 22, 2019. On September 30, the Court granted the Motion to transfer venue, transferring the case to the Southern District of New York. On December 6, Defendants filed a Motion to Dismiss the amended Complaint. On April 7, 2020, the Court issued an Order granting Defendants' Motion to Dismiss. Lead Plaintiff filed a Notice appealing the Court's dismissal Order on May 6. On June 29, Lead Plaintiff withdrew the appeal.