According to the Complaint, Cheetah Mobile, Inc. is a mobile Internet company that offers mobile utility products (such as Clean Master and Cheetah Keyboard), casual games (such as Piano Tiles 2, Bricks n Balls), and live streaming product Live.me. The Company provides its advertising customers, which include direct advertisers and mobile advertising networks through which advertisers place their advertisements, with direct access to highly targeted mobile users and global promotional channels.
On February 21, 2020, before the market opened, Cheetah Mobile disclosed that its Google Play Store, Google AdMob, and Google AdManager accounts were disabled on February 20, 2020 “because some of the Company’s apps had not been compliant with Google policies, resulting in certain invalid traffic.”
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, the Complaint alleges Defendants failed to disclose to investors: (1) that certain of Cheetah Mobile’s apps were not compliant with the terms of its agreements with Google; (2) that, as a result there was a reasonable likelihood that Google would terminate its advertising contracts with the Company; (3) that, as a result of the foregoing, the Company’s ability to attract new users would be adversely impacted; (4) that, as a result, the Company’s revenue was reasonably likely to decline; and (5) that as a result, 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.
On August 24, 2020, the Court issued an Order consolidating cases.