Set up a collective lawsuit against Orchid Pavilion

August 28, the United States three law firms announced separately, to the Orchid Pavilion set potential to launch a class action, accusing Orchid Pavilion set potential company and company executives, directors violated the relevant laws.

The plaintiff believed that the Orchid Pavilion collection potential in the June 6 initial public release to August 19 this time, issued a series of substantive error and misleading information statement, rendering the company's financial performance and prospects. The company wrongly stated or failed to disclose the fact that the second-quarter revenue growth had fallen sharply, and that the cost growth exceeded the revenue growth and the consequential consequences.

The three law firms said they would represent the U.S. and international investors who bought the Orchid Pavilion shares during the period. It is reported that the relevant litigation documents have been submitted to the United States local courts.

In the case of a collective indictment, the head of the Orchid Pavilion, said in an interview with the Securities Daily, "the company's legal personnel are preparing the relevant response content." As of press, the Orchid Pavilion has not yet publicly responded.

June 6, 2013, Orchid Pavilion Set in the NYSE listing, the issue price of 9.5 U.S. dollars, financing 79 million U.S. dollars, listed on the day closed at 11.61 U.S. dollars, or 22%. "Orchid Pavilion set potential on the first day without break, let the industry think that the frozen period of the stock is in the past, the previous listing of the stock is November 21 last year, the gathering era, when the stock market has 5 months of empty window period." An industry insider who declined to be named said the securities daily.

The Orchid Pavilion has just been hit by a high-profile episode.

From the release prospectus to the final successful listing, the Orchid Pavilion has been quite low-key. Until August 27, Orchid Pavilion set potential CEO Guo go to the content of the interview to see the media, at this time, from the Orchid Pavilion set potential IPO has passed two months.

Guo to disease in the media interview, will be the success of the Orchid Pavilion set three points: first, business model. A rooted China, 100% to enjoy China's cost structure, but through the Internet to the success of the world market; second, supply chain. Take the wedding dress for example, before the Orchid Pavilion is set, no company can make a mass customization of the wedding dress. Third, data. All decisions are given to data.

Before the listing of the Orchid Pavilion, there have been several companies in the U.S. capital market before the door, for the Orchid Pavilion can be "reverse attack" reasons. Guo went on to think that the most important thing is not to tell the story to investors, but to solve two things: first, let the investors feel that you can be trusted, everything is frank communication, and the second is to let investors feel that you have the potential to continue to develop.

As for the key issue of the IPO-pricing, Guo said: "What is the benefit of more than 1 dollars?" Can you get more meat? No, so with the city on the line, the most important thing is to do a successful listing, the back up a 20%, we all happy, more than 1 dollar final fall of splinters, the next day was a person accused, good. According to Guo's disease revealed that the Orchid Pavilion collection was nearly 10 times times the excess subscription.

However, just after Guo went on the successful study of the next day, the voice has not yet landed, the investors have been class action.

Lower revenue growth triggers investor discontent

After the close of August 19, the Orchid Pavilion has released its quarterly bulletin as at June 30, with a two-quarter revenue of 72.2 million U.S. dollars and an increase of 52.6%, compared with analysts ' forecast of $75.8 million trillion, in other words, the gap between the revenues of the pavilion and analysts ' forecasts. In addition, the operation cost of Orchid Pavilion is increased by 57%. On the first trading day after the earnings report, the shares of the pavilion were plunged 40%.

The IPO prospectus shows that the company first achieved a turnround in the four quarter of last year, with revenue growth of nearly 100% per cent this year. At that time, there was a view that the Orchid Pavilion collection potential for listing and packaging performance. As a result, the two quarter of the Orchid Pavilion is only 52.6% of the revenue growth, further constitute the evidence of this view. In addition, the Orchid Pavilion also predicts that the company's third-quarter revenue year-on-year growth of only 33%-37%, continue to show a downward trend.

As a result, three law firms believe that the pavilion has previously issued significant false and misleading statements on financial performance and future prospects and failed to disclose the adverse facts truthfully.

In this respect, the industry insiders said to the securities daily: "Orchid Pavilion set potential should not exist to do the problem of cooking, because the company is engaged in business enterprise, if you want to in a large number of C-terminal fraud, the cost is too high." Moreover, revenue is only more than 3 million dollars less than expected, and if it does, it will not leave the gap. ”

As of August 28, the pavilion has fallen from a maximum of 23.38 U.S. dollars to 10.36 U.S. dollars, is approaching the price of 9.5 U.S. dollars. Similarly, last May, when Facebook, a social-networking site, had been hit by a break in share prices, more than 40 investor class lawsuits were directed at investors to conceal the weakness of growth expectations. "These are common things in the United States," the people said.

Another view is that the performance of the Orchid Pavilion may affect the future listing process of Alibaba, which contains similar business.