Shares in Wanda Sports Tumble 14% on Losses, Allegations
Wanda Sports sent its stock 14% lower on losses for the third quarter, topped with ongoing investigations by law firms.
The stock in Wanda Sports Group Company Ltd. (Nasdaq: WSG) plunged more than 14% to $2.78 per American depositary share on Monday after the company announced losses for the third quarter.
The Beijing-based sports platform said in a statement today that in the three months through September its revenue was $267.4 million, up 8% year-over-year. Net loss was $34 million, or 25 cents per ADS, in contrast to a net income of $14.5 million, or 9 cents per ADS, a year ago.
Wanda Sports attributed the losses to stock-based compensation expenses, IPO-related costs and financing costs.
After raising $190 million in its initial public offering in July, Wanda Sports has been facing class action lawsuits in the United States. Investors' rights litigators alleged that the company distributed "materially misleading" business information to the public and caused damage to investors.
Rosen Law Firm claimed in a statement last week, "Since the IPO, Wanda Sports reported a 30% decrease in year-over-year revenue for the second quarter of 2019 and announced an expected decrease in year-over-year revenue for fiscal year 2019. The Company's Board and management has also changed substantially since the IPO in late July. Wanda Sports's securities have consistently traded well below the IPO price, damaging investors."
The firm said it will continue to investigate and called on the investors in the company to join the case. Other litigators, among which is Bragar Eagel & Squire P.C., are also jumping in on the action.
Launched in 2018, Wanda Sports operates as the sports arm of Chinese conglomerate Dalian Wanda Group. It has more than 60 offices and 1,600 employees across the world.
Looking forward, the company said it expects to generate revenue in the range of $271.3 million to $287.9 million in the fourth quarter.