Labaton Sucharow LLP announces that on January 17, 2019, it filed a securities class action lawsuit on behalf of its client ODS Capital LLC (“ODS Capital”) against Qihoo 360 Technology Co. Ltd. (NYSE: QIHU) (“Qihoo 360” or the “Company”) and certain of its executives (collectively, “Defendants”). The action, captioned ODS Capital LLC v. Qihoo 360 Technology Co. Ltd., No. 19-cv-00501 (S.D.N.Y.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder, on behalf of all former owners of Qihoo 360 stock and American Depositary Shares (“ADSs”) who sold shares, and were damaged thereby, during the period between January 11, 2016 and July 15, 2016, inclusive (the “Class Period”).
On December 18, 2015, Qihoo 360, purported to be the leading internet company in the People’s Republic of China, announced that it had entered into a definitive merger agreement pursuant to which it would be acquired by a consortium of investors in an “all-cash transaction valued at approximately $9.3 billion, including the redemption of approximately $1.6 billion of debt” (the “Merger”). Pursuant to the terms of the merger agreement, the Company’s shares and ADS would cease to exist in exchange for the right to receive a cash amount without interest.
Contrary to the Company’s repeated reassurances about no substantial changes to its structures or relisting following the Merger, shortly after the going-private deal closed, media news outlets reported on the Company’s relisting plans, which was formally announced on November 6, 2017. This deal, operating as a “backdoor listing,” would allow Qihoo 360 to return to the stock market by relisting on the Shanghai Stock Exchange at a multiple, to the detriment of shareholders who unknowingly sold Qihoo 360 stock and ADS at substantially deflated values during the Class Period.
The Complaint alleges that Qihoo 360 shareholders were misled into accepting consideration from the Merger that was well below fair value for their Qihoo 360 shares. Specifically, defendants failed to disclose: (1) that the Company’s Proxy materials and Annual Report misrepresented and/or omitted material information that was necessary for Company shareholders to make an informed decision concerning whether to vote in favor of the Merger; (2) that contrary to the representations in the Proxy and the Annual Report, the Company already had plans to relist its shares in China prior to closing the Merger and its delisting from the NYSE; and (3) as a result, the Company’s statements about its business, operations, and prospects lacked a reasonable basis.
If you sold Qihoo 360 stock or ADS during the Class Period, and was damaged thereby, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the Southern District of New York no later than March 18, 2019. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at firstname.lastname@example.org. You can view a copy of the complaint here.