Webtoon Entertainment ($WBTN) $10.05 Million Investor Settlement
Webtoon Entertainment has agreed to a proposed $10.05 million settlement to resolve investor claims that it misled the market about its revenue growth and financial health.
Outline:
Following its 2024 IPO, Webtoon touted its growth potential in advertising and IP adaptations. Investors say the company overstated its financial health and failed to disclose the full impact of foreign currency risks and declining revenue streams. On August 8, 2024, Webtoon reported Q2 2024 results showing revenue growth of just 0.1%, declines in key segments, and a $76.6 million net loss, and $WBTN fell 38.2% the next day. The case has now moved to a proposed $10.05 million settlement.
Timeline:
August 8, 2024: Webtoon announced Q2 2024 financial results, reporting total revenue growth of just 0.1%, a 3.6% decline in advertising revenue, a 3.7% decline in IP adaptations revenue, and a net loss of $76.6 million, which it attributed to foreign currency fluctuations in the Korean won and Japanese yen.
August 9, 2024: $WBTN fell 38.2% following the earnings release.
Background:
Webtoon Entertainment, the company behind the $WBTN webcomics and IP platform, went public in 2024. Following its IPO, the company touted its growth potential in advertising and IP adaptations as key drivers of future revenue.
Investors say that picture was overstated. According to the case, Webtoon overstated its financial health and future revenue potential and failed to disclose the full impact of foreign currency risks and declining revenue streams on its business.
On August 8, 2024, Webtoon reported Q2 2024 results showing total revenue growth of only 0.1%, a 3.6% decline in advertising revenue, a 3.7% decline in IP adaptations revenue, and a net loss of $76.6 million.
On the earnings call, company leadership acknowledged challenges in maintaining revenue growth, pointing to weaker advertising performance and difficulties in the IP adaptations segment.
Following the disclosure, $WBTN fell 38.2% on August 9, 2024. An investor filed suit against Webtoon in the U.S. District Court for the Central District of California.
What Can Investors Expect Now?
Webtoon Entertainment has agreed to a proposed $10.05 million settlement to resolve investor claims that it misled the market about its revenue growth and financial health.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.
Frequently Asked Questions
All persons and entities who purchased or otherwise acquired WEBTOON common stock pursuant or traceable to the Registration Statement issued in connection with WEBTOON’s initial public offering (“IPO”).
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
The final payout amount depends on your specific trades and the number of investors participating in the settlement.
If 100% of investors file their claims - the average payout will be $0.45 per share. Although typically only 25% of investors file claims, in this case, the average recovery will be $1.8 per share.
If you're eligible, you can file your claim directly from this case page by clicking the "Collect Payout" button.
More than 100 companies are currently paying out settlements. Connect your brokerage account to automatically check which ones you may have missed — or file manually for this case.
11th.com is an investor recovery company that helps investors track and collect securities class action settlements. We will:
1. Prepare documents for your payout.
2. Audit the claim and make sure you get the maximum possible payout.
3. File a claim with the settlement administration.
4. Correspond with the settlement administration to resolve emerging issues.
5. Deliver payout directly to your brokerage account.
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.