Core Viewpoint - The United States District Court for the Central District of California has allowed a securities fraud class action against WEBTOON Entertainment Inc. to proceed, indicating that the company may have misled investors regarding its Monthly Active Users (MAU) metrics during its IPO [2][3]. Group 1: Allegations of Misleading Information - The court found that the plaintiff adequately alleged that WEBTOON misrepresented the stability and growth potential of its MAU metrics at the time of its IPO, despite internal knowledge of declining user levels [3]. - WEBTOON allegedly characterized its MAU levels as "stable," "durable," and "consistent," while internally tracking a decline in these metrics leading up to the IPO [3]. - The delay of a promised AI recommendation tool was cited as a contributing factor to the weakening user metrics, which the company allegedly failed to disclose [3]. Group 2: Risk Disclosures - The court held that WEBTOON's risk disclosures were misleading, as the company only warned that MAU declines "could" occur, despite these risks having already materialized prior to the IPO [4]. - The complaint suggested that management was aware of the adverse trends but withheld this information from investors, creating a misleading impression of the company's performance [4]. Group 3: Actions for Shareholders - Shareholders who purchased WEBTOON shares around the June 27, 2024 IPO are encouraged to seek corporate reforms and the return of funds, with no cost involved [1][5].
Grabar Law Office Investigates Claims on Behalf of Long-Term Shareholders of WEBTOON Entertainment Inc. (WBTN) As Securities Fraud Class Action Survives Motion to Dismiss