DouYu International Holdings Limited (NASDAQ: DOYU)

This lawsuit is for anyone who acquired securities in DouYu International Holdings Limited (NASDAQ: DOYU) from April 30, 2021 through May 9, 2023.

The lawsuit alleges that the Company and certain of its executives violated federal law. Specifically, the lawsuit alleges that, throughout the time period mentioned above, the Company misled investors regarding its financial condition. More specifically, the lawsuit alleges that the Company misled investors by continually downplaying the increasingly aggressive stance that the Chinese Government was taking against the Company as a provider of online gaming, which the Chinese Government considers as corrupting Chinese youth.

On March 29, 2022, after market hours, The Wall Street Journal published an article detailing new regulations being drafted by Chinese authorities regarding the country’s live-streaming industry, including plans to set a daily limit on how much money live-streamers can receive from fans, as well as tighter censorship over content, in an effort to “[exert] greater influence over the content consumed by its young people.” On this news, the price of the Company’s stock dropped precipitously on unusually heavy trading volume. Then, on April 26, 2022, Seeking Alpha published an article warning that DouYu held “several red flags, as a result of external circumstance,” and that, “[with] the regulatory crackdown on the Chinese gaming industry by authorities, as well as a state intervention to prevent a merger, the stock is increasingly struggling to create value for its shareholders.” On this news, the price of the Company’s stock again dropped precipitously on unusually heavy trading volume. Then, on February 27, 2023, the Cyberspace Administration of China (“CAC”) released a statement in which it included DouYu in a list of platforms having “harmful information such a spreading pornographic drainage, vulgarity, [and] violent abuse.” The CAC claimed that “[in] order to solve the problem, [it would] continue to increase the crackdown on violations of laws and regulations, continue to do a good job in the work of ‘sweeping pornographic and illegal activities’ online, and effectively safeguard the people’s online cultural rights and interests.” On this news, the price of the Company’s stock again dropped precipitously on unusually heavy trading volume. Finally, on May 8, 2023, after the markets closed, the CAC announced that “the State Internet Information Office instructed the Hubei Provincial Internet Information Office to send a working group to the Douyu platform to carry out a one-month centralized rectification supervision.” The following morning, May 9, 2023, before the market opened, DouYu issued a press release stating that the “CAC has sent an inspection team to the Company due to certain alleged violations of content rules and regulations on its platform. The CAC team is expected to conduct a one-month on-site inspection of the Company’s content platform, which DouYu will fully cooperate with. DouYu is also concurrently conducting a comprehensive internal review of its content monitoring system. As a platform committed to regulatory compliance and the safety of its user community, DouYu plans to implement all necessary remedial measures based on the CAC inspection and its own internal review. DouYu is expected to maintain its normal operations during this period of time.” On this news, the price of the Company’s stock again dropped precipitously on unusually heavy trading volume.

The Law Offices of Howard G. Smith seeks to recover damages on behalf of class members. If you acquired securities in DouYu International Holdings Limited (NASDAQ: DOYU) from April 30, 2021 through May 9, 2023 you may join the lawsuit by submitting your information online, or you may call the Law Offices of Howard G. Smith and speak to Mr. Smith directly to learn how he can protect your rights.