Douyu International Holdings

"The State Action alleges that Defendants violated certain federal securities laws by making misrepresentations and/or omissions of material fact in the Offering Materials for DouYu’s IPO concerning (a) Tencent’s plans to invest at least $1 billion in another Chinese live-streaming company (“Kuaishou”), and the resulting risk that this investment would enable Kuaishou to expand and encroach upon DouYu’s eSports live-streaming business; (b) DouYu’s lucrative “lucky draw” feature, including the feature’s non-compliance with Chinese law and DouYu’s resulting plans to materially modify or eliminate it; (c) DouYu’s decelerating revenue growth in the face of increased competition; and (d) DouYu’s failure to verify the identity of one of its top streamers, who had been fabricating her identity to fool unsuspecting users. The Federal Action alleged much of the same misconduct, and also that Defendants made misrepresentations and/or omissions of material fact concerning the transferability of DouYu’s virtual currency and the impact on DouYu’s revenue of purchases by DouYu streamers of “virtual gifts” for themselves. Both Actions also allege that Defendants’ misstatements or omissions artificially inflated the price of DouYu ADS during the Class Period. Defendants deny all allegations of wrongdoing and liability asserted in the Actions."