A class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of Yongye International, Inc. (“Yongye”) (NASDAQ:YONG) common stock during the period between August 11, 2010 and May 11, 2011 (the “Class Period”). The complaint charges Yongye and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Yongye, through its primary operating subsidiary, Yongye Nongfeng Biotechnology Co., Ltd., which is a 95% owned subsidiary of Yongye, engages in the manufacturing, research and development and sale of fulvic acid-based liquid and powder nutrient compounds used in the agriculture industry in the People’s Republic of China.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business practices and financial results. Specifically, defendants failed to disclose that the Company’s financial results were inflated and were inconsistent with Yongye’s production capabilities. As a result of defendants’ false statements, Yongye stock traded at artificially inflated prices during the Class Period, reaching a high of $9.09 per share on November 8, 2010.
On May 9, 2011, Yongye issued a press release announcing its first quarter 2011 financial results. The Company reported revenue of $50.2 million and net income of $8.4 million, or $0.16 diluted earnings per share. Then on May 11, 2011, Seeking Alpha issued an article entitled “Yongye International’s Reported Production: SEC Filings Raise Red Flags.” The article stated in part “that the company and its joint-venture partner could not have produced, and therefore sold, the reported plant product tonnages given the company’s stated manufacturing capacity and shipments.” On this news, Yongye’s stock fell to $4.85 per share on May 12, 2011, from $5.19 per share on May 10, 2011.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) Yongye’s financial results reported to the SEC and investors were inconsistent with the Company’s ability to produce the tonnage reported as shipments of sales; (b) Yongye’s reported financial statements were grossly inflated by including revenue it had not earned; and (c) Yongye’s business was not growing at the rate represented by defendants.
If you are a current shareholder and /or purchased during the class period between August 11, 2010 and May 11, 2011 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.