TUYA INC. CLASS ACTION ALERT : Wolf Haldenstein Adler

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NEW YORK, Aug. 16, 2022 (GLOBE NEWSWIRE) — Wolf Haldenstein Adler Freeman & Herz LLP announces that a federal securities class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of investors who purchased or otherwise acquired the American Depositary Receipts (“ADRs”) of Tuya Inc. (“Tuya” or the “Company”) (NYSE: TUYA) pursuant to and/or traceable to the IPO of the Company in March 2021 (the “IPO”).

All investors who purchased ADRs from Tuya Inc. and losses incurred are requested to contact the company immediately at [email protected] or (800) 575-0735 or (212) 545-4774. You can get additional information about the action or join the case on our website, www.whafh.com.

If you have suffered losses in Tuya Inc. ADRs, you can, no later than October 11, 2022, ask the court to name you as lead plaintiff in the proposed class. Please contact Wolf Haldenstein to find out more about your rights as an investor in the ADRs of Tuya Inc.

PLEASE CLICK HERE TO JOIN THE CASE

Tuya offers a “Internet of Things” cloud platform that offers a suite of offerings, including Platform-as-a-Service, or PaaS, and Software-as-a-Service, or SaaS, to enterprises and developers. The Company’s proprietary products and services enable “smart devices”, for example, household items and internet-connected devices, to communicate and interact with end users and online information and services.

About 20% of Tuya’s customers sell products online through e-commerce marketplaces such as Amazon.com. In order to maintain the integrity of its platform, Amazon.com has long banned the practice of sellers compensating review writers for their reviews in most cases. Despite this ban, in April 2019, the general public site Who? published a report claiming that Amazon had been “flooded with fake five-star reviews”, and that sellers were listing products with tens of thousands of unverified reviews.

In August 2020, a USC/UCLA research paper analyzed the market for fake products reviewed on Amazon.com. The newspaper found that the “large majority” (84%) of sellers with fake reviews were located in China.

In September 2020, the Financial Times published an article titled “Amazon removes 20,000 reviews after proof of benefits for posts. The article said Amazon had removed 20,000 product reviews written by 7 of its top 10 UK reviewers.

On March 1, 2021, a data security organization, Safety Detectives, gained access to a data server located in China that contained 7GB of data and over 13 million records that appeared to be linked to a widespread fake scam. .

Prior to the IPO, Tuya claimed to be experiencing phenomenal growth. In 2020, the company claimed that its technology powers more than 116.5 million smart devices in more than 1,100 product categories sold in more than 220 countries and regions around the world. Tuya claimed to be the “the largest IoT PaaS company in the global IoT PaaS market by volume of powered smart devices” and said that his “ha business[d] rapidly scaled in recent periods,70% year-over-year revenue growth to $179.9 million in 2020.

On February 26, 2021, Tuya filed a registration statement on Form F-1, which, after amendments on March 12 and March 16, 2021, was declared effective on March 17, 2021. On March 19, 2021, the company filed a prospectus for the Initial Public Offering (“IPO”) on Form 424B4, which has incorporated and forms part of the registration statement. The registration statement was used to sell over 45 million Tuya ADRs at $21 per ADR, generating over $946 million in revenue.

On May 11, 2021, an article on techcrunch.com revealed that “Several top Chinese sellers have disappeared from Amazon.” The report says more than 13.1 million records documenting a massive fake review scam have been uncovered involving more than 200,000 Amazon accounts. Two months later, on July 9, 2021, verdict.co.uk reported that Amazon had “closed 340 online stores of one of its largest Chinese retailers in the first half of this year” as it cracked down on paid reviews and other violations of Amazon’s Terms of Service. According to the report, Amazon banned hundreds of Chinese brands on thousands of seller accounts, many of whom were Tuya customers, citing repeated and significant violations.

Then, on August 18, 2021, Tuya issued a press release announcing the company’s financial results for the 2nd quarter of 2021. The release guided the company’s outlook for the 3rd quarter of 2021, which indicated that Tuya expects what revenues are in the range of just 83 to 86 million dollars, which surprised and disappointed analysts and investors.

During the earnings call on the same day, management disclosed that the reason for the weak Q3 revenue forecast was that “Our customers face a series of challenges, including Amazon’s strict enforcement of Seller Policy.”

By August 2022, Tuya’s ADR had fallen below $2 per ADR – 90% below the level where Tuya’s ADRs were sold to the investing public during the IPO.

Wolf Haldenstein has extensive experience in prosecuting securities class action and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. This firm’s reputation and expertise in shareholder litigation and other class actions have been repeatedly recognized by the courts, which have appointed it to major positions in complex, multi-district and consolidated securities litigation.

If you wish to discuss this action or have any questions regarding your rights and interests in this case, please contact Wolf Haldenstein immediately by phone at (800) 575-0735, by email at [email protected], or visit our site Web at www.whafh.com.

Contact:

Wolf Haldenstein Adler Freeman & Herz LLP
Patrick Donovan, Esq.
Gregory Stone, Director of Business and Financial Analysis
Email: [email protected], [email protected] or [email protected]
Tel: (800) 575-0735 or (212) 545-4774

This press release may be considered attorney advertising in certain jurisdictions under applicable law and ethics rules.

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