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VNET.US
id: 922

VNET (VNET) Loan and New Share Issuance Case

S.D. New York
Court
1:23-cv-11187
Case number
08 Apr 2022
Class period Start
15 Feb 2023
Class period End
26 Feb 2024
Lead Plaintiff motion deadline
  • VNET's co-founder, Josh Sheng Chen, used company shares as collateral for a loan in August 2021.
  • GenTao's default and Bold Ally announcement caused a drop in $VNET, and later, the issuance of new shares led to another $VNET decline.
  • The first affected investor already filed the initial claim.
In August 2021, VNET's co-founder, Josh Sheng Chen, and his companies borrowed $50.25 million from Bold Ally, using his shares in GenTao and other companies as collateral.

On February 13, 2023, Bold Ally declared its right to the collateral due to a default by GenTao, leading to a 3.2% $VNET drop and a further 17.8% decline the next day.

On February 15, 2023, VNET revealed the issuance of 555,000 new shares with special voting power to the Executive Chairman to "protect the Company’s interests and continued stability," causing another 2% drop in $VNET.

Considering all the representations, investors have reasons to suspect that VNET didn't disclose GenTao's financial problems and the risk of default on the agreement. And that this omission hid the possibility of Bold Ally taking over Sheng Chen's stake, resulting in the issuance of new shares that diluted other investors' ownership.
Case Status
Lead Plaintiff Appointed
Alleged Offence
Mismanagement
Misleading Statements
Omissions
Suspected Party
Directors
Management
Security Type
Depository Securities (ADS, ADR, GDR)
Trade Direction
Long
Shock Event Date
14 February 2023
Filing date
26 December 2023
Lead Plaintiff Deadline
26 February 2024
Collecting participants…

VNET Group Inc DRC

VNET Group, Inc., an investment holding company, provides hosting and related services in China. It offers managed hosting services consisting of managed retail services, such as colocation service...

    Ticker
    VNET.US
    ISIN
    US90138A1034
    Sector
    Technology
    Industry
    Information Technology Services
    Country
    USA
    Address
    Guanjie Building, Beijing, China, 100016