Case Name: Alibaba 2025

Settlement Fund: $433,500,000

Claim Filing Deadline: 3/25/2025

Class Period: 11/13/2019 - 12/23/2020

Class definition: All persons and/or entities that purchased or otherwise acquired Alibaba ADS between November 13, 2019 and December 23, 2020, inclusive.

What this case is about:

E-commerce giant Alibaba has settled a securities suit over two unrelated claims: first, that it harmed investors when they canceled an affiliate's IPO and second, by violating China's anti-monopoly laws.

Plaintiffs allege that Alibaba misled investors in the run up to the IPO of Ant Group, which operates the world's largest mobile payment platform, Alipay, and in which Alibaba had a 33% stake. Ant Group had been bound for a $34.5 billion IPO, which would have been the largest ever (topping Alibaba's own $21.7 billion IPO by a considerable margin).

However, on November 3, 2020, Alibaba announced the suspension of the ambitious launch because Ant Group, "may not meet listing qualifications or disclosure requirements due to material matters relating to the regulatory interview of its ultimate controller, executive chairman and chief executive officer by the relevant regulators." Within a day of this announcement, Alibaba share prices fell from $310.84 per share to $285.57 per share, or 8.13%.

According to the plaintiffs, Alibaba also violated China's Anti-Unfair Competition Law with "draconian" tactics. "Leading up to and during the Class Period," plaintiffs wrote in their second amended complaint, "Alibaba abused its market dominant position and violated Chinese law by imposing unreasonable and unlawful restrictions on vendors. Most notably, Alibaba engaged in a tactic called 'Choose One of Two,' by which Alibaba forced merchants to choose only one platform—Alibaba—as their exclusive distribution channel, or face punishment if the merchant operated online stores or ran promotions on both Alibaba and any of Alibaba’s rival platforms. As Alibaba was China’s single largest e-commerce platform, vendors were faced with the draconian choice of giving up their presence on Alibaba or giving up all other sales venues."

Many vendors complained and several sued Alibaba, which drew unwanted regulatory scrutiny and media exposure, including a November 10, 2020 Bloomberg news report titled "China Clampdown on Big Tech Puts More Billionaires on Notice." After Bloomberg's story ran, Alibaba fell 8.26%-- this time from $290.53 to $266.54.

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