The9 Sued By Investors

22 Oct 2009 at 13:43:54 by Bill Vaughan

Investors in the former World of Warcraft operators in China, The9, are suing the company for failing to admit they were unlikely to renew the WoW contract, leading to a huge drop in revenue.

The lawsuit alleges that The9 made numerous inaccurate statements that the company's financial condition and future prospects were positive, based on four claims; Firstly, during the time the statements were made, it was becoming increasingly less likely that the WoW contract would be renewed, secondly, because at the time of the statements The9 had not even begun formal negotiations with Blizzard to renew. The third claim is that The9 and Blizzard had been “at odds” regarding The9's handling of WoW, and lastly, that EA's recent large investment into The9 made it even less likely that Blizzard would renew contracts, considering that EA is one of its biggest competitors.

In February, The9 reported a $51.1m USD net income for 2008, however, on 15 July that figure had dropped by $36.9m USD, or 72%, due to the loss of WoW, which led to an 18% drop in share prices.

Visit out WoW channel to see the class action filed against The9.

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