Vipshop Holdings Ltd – ADR (NYSE:VIPS) is another company to have declined significantly in today’s trading session after the commencement of a class action lawsuit against the company in New York. According to the plaintiffs, shareholders who purchased the company’s shares between February 17, 2015 and March 18, 2015, will be eligible. Vipshop Holdings released misleading and inaccurate statements related to its business, operational, and compliance policies according to the lawsuit. It includes overstating sales, cash flows, profits and asset accounts, along with GAAP violations in its financial statements. If this class action lawsuit stands true and Vipshop Holdings Ltd – ADR (NYSE:VIPS) is found guilty, it could mean large penalties and a further drop in its share price. The shares of Vipshop have grown 4.18% year-to-date and smart money holds a positive outlook of the company. 48 hedge funds tracked by Insider Monkey made aggregate investments of $3.22 billion in the company at the end of the first quarter, against previous quarter holdings of $2.16 billion from 47 hedge fund managers. While the increase in capital is significant, shares of Vipshop were up by more than 50% during the first quarter, which accounts for the gains.
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