A class action lawsuit has been filed against Evolution AB, a leading global online gaming company by Robbins LLP, a distinguished law firm based in San Diego, California.
Robbins LLP has a proven track record of helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing. Their relentless pursuit of justice and accountability has resulted in the recovery of over $1 billion for shareholders since the firm was established in 2002.
The firm operates on a contingency fee basis, which means that shareholders are not burdened with any fees or expenses. This approach ensures that the interests of the shareholders are at the forefront, and they only bear a cost if there is a successful outcome.
Purchase of American Depository Shares
The lawsuit, representing all investors who purchased or otherwise acquired American Depository Shares (ADSs) of Evolution between 14 February 2019, and 25 October 2023, alleges that the company misled investors about its business prospects.
The lawsuit was triggered by a report released by Analyst Alpha Generation Limited on 24 January, 2022. The report, which was circulated among certain institutional investors, suggested that a significant portion of Evolution’s revenue could be at risk due to potential future regulatory clampdowns. It also indicated that Evolution might be exposed to revenues from potentially illegal gambling activities. Following the release of this report, Evolution’s ADS price fell by approximately 15 percent, closing at $115.00 per ADS on 27 January, 2022.
The situation worsened for Evolution when, on 26 April, 2022, Australia’s gambling regulator requested Australian internet service providers to block six online gambling sites, at least five of which were customers of Evolution, on grounds of alleged illegal gambling activities. This development led to a further drop in Evolution’s ADS price, closing at $96.73 per ADS on 27 April 2022.
On 4 May 2022, the Swedish Administrative Court upheld most of the record Swedish fines of approximately $17.8 million imposed on brands operated by ComeOn Group, a customer of Evolution, for breaches of Swedish online gambling regulations. This news caused Evolution’s ADS price to fall by approximately 11 percent, closing at $101.09 per ADS on 5 May, 2022.
Some businesses did not exhibit significant growth in Q3 2023
Further challenges arose when industry participants lobbied the UK government against an overhaul of gambling laws in the UK. This news led to a drop in Evolution’s ADS price, closing at $87.25 per ADS on May 11, 2022.
Evolution’s financial and operating results for the first quarter of 2023, released on April 27, 2023, revealed that the RNG segment of its business did not grow, and its North American business segment had experienced a low growth rate. This disclosure resulted in a further drop in Evolution’s ADS price, closing at $125.26 per ADS on 2 May, 2023.
Finally, on October 26, 2023, Evolution disclosed in its financial and operating results for the third quarter of 2023 and during an analyst call that the company faced delays in opening new studios and that revenues for its RNG and North American business segments did not grow. This news led to a drop in Evolution’s ADS price, closing at $86.80 per ADS on 27 October, 2023.
Robbins LLP is now inviting similarly situated shareholders to participate in the class action against Evolution AB. Those who wish to act as lead plaintiff for the class should contact Robbins LLP. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. “Participation in the case is not mandatory to be eligible for a recovery.” stated Robbins LLP.
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