Invested in
Applied Digital Corporation?
Attention Applied Digital shareholders: contact investor rights lawyers for a free evaluation of your potential claims for compensation today.
- Did you acquire shares of Applied Digital (NASDAQ: APLD) in or before April 2022, or do you still hold your Applied Digital shares?
- Are you concerned about the recent performance of Applied Digital’s stock price?
- Are you concerned about the conduct of Applies Digital’s officers and directors related to alleged misrepresentations about the profitability of its data center hosting business and the independence of its board of directors?
- Would you like your potential options for compensation and/or redress to be reviewed by an experienced team of investor lawyers?
Request a free case evaluation of your potential claims for compensation today, via email at arosca@rscounsel.law, through the contact form on this page, or by calling 888-998-0530.
Contact Us About Your
Investments
Free Case Evaluation
Posted November 10, 2023
Applied Digital Class Action Investigation
Securities attorneys Alan Rosca, Paul Scarlato, and Kathryn Weidner have been investigating potential securities violations and corporate misconduct, as well as questionable business practices involving Applied Digital and have identified potential areas of concern for Applied Digital investors.
What Applied Digital Investors May Do
APLD investors interested in an evaluation of their potential options to seek compensation and/or pursue claims related to their Applied Digital investment may contact investor rights attorneys Alan Rosca, Paul Scarlato, or Kathryn Weidner. Claims that are not timely pursued may expire or otherwise be lost, generally speaking.
Get in Touch with an Experienced Team of Investor Attorneys
Attorneys Rosca, Scarlato, and Weidner have extensive experience in seeking compensation related to investor harm and pursuing claims arising out of alleged violations of securities law and/or corporate misconduct, and are currently evaluating potential claims on behalf of investors in Applied Digital.
They typically work on a contingent fee basis, do not require any money down from their clients, advance case expenses, and only get paid for their fees and expenses if and when successful, following review and approval by the Court of any fee application.
Concerned APLD stock investors may contact attorneys Alan Rosca, Paul Scarlato, or Kathryn Weidner to discuss their potential options toll free at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
Potential Compensation Claims
Has Applied Digital Been Accused of Misconduct?
Applied Digital and two of its executives, Wesley Cummings and David Rench, have been the subject of a securities class action lawsuit, filed in the United States District Court for the District of Northern District of Texas.
Applied Digital and several of its control persons are accused in class action lawsuit of, among others, violating securities laws by allegedly making materially false and/or misleading statements about the profitability of its data center hosting business and its ability to successfully transition into a low-cost AI Cloud services provider. According to the complaint, Applied Digital had overstated the efficacy of its business model and failed to maintain proper corporate governance standards. The case is pending as of the date of this blog.
What Happened to Applied Digital’s Stock Price?
According to the class action complaint, on July 6, 2023, a research company and short seller known as The Bear Cave published a report (“Bear Cave Report”) alleging, amongst others, that “Applied Digital relies on puffery over substance and is a perfect case study on our market’s bizarre underbelly of reverse mergers, microcaps, and shell companies.“
Also, on July 6, 2023, another market research company publishing short selling researches known as Wolfpack Research stated in a report (“Wolfpack Report”) that Applied Digital “a potato farm turned failed bitcoin miner, pumped up its stock in May by claiming to pivot from a floundering business hosting bitcoin miners, to becoming a low-cost AI Cloud service provider. The explosion of interest in AI after the emergence of Chat GPT has predictably attracted the worst promoters and scumbags to peddle fake AI wares to credulous investors, and our analysis indicates that APLD is one of these grifters because it is not an AI company.” The Wolfpack Report reportedly questions, among others, certain claims by Applied Digital CEO’s about company’s investments in GPUs, as well as Applied Digital’s capacity to run a digital cloud platform on “just eight subdomains.” Other issues brought up in the Wolfpack Report include Applied Digital’s power capacity, and the independence of Applied Digital‘s board of directors.
Following the publication of the Bear Cave and Wolfpack reports, Applied Digital’s stock price reportedly fell $1.27 per share, or 14.16%, to close at $7.70 per share on July 6, 2023.
On July 26, 2023, another market research analyst and short seller known as Friendly Bear published a report (“Friendly Bear Report”) alleging, amongst others, that “Applied Digital represents one of the worst governance situations.” According to the report, Applied Digital’s primary underwriter B. Riley “is controlling managerial decisions at Applied Digital to the detriment of Applied Digital shareholders” and that “Applied Digital’s board does not “meet [] the independence requirements under Nasdaq.” More specifically, the Friendly Bear Report alleges that two of the independent directors at Applied Digital, Chuck Hastings and Virginia Moore, have ties to B. Riley, in addition to Applied Digital’s CEO, Wes Cummings, who reportedly is President of B. Riley Asset Management, and as such “open the company up to significant legal liabilities.”
Following publication of the Friendly Bear Report, Applied Digital’s stock price reportedly fell $0.60 per share, or 6%, over the following two trading sessions, to close at $9.40 per share on July 28, 2023, the class action complaint alleges.
According to Yahoo Finance data, the APLD stock price continued to decline since, and on November 7, 2023 closed at $5.18 per share.
Potential Compensation Claims
Do Applied Digital Shareholders Have Claims for Compensation?
Investor rights attorneys Alan Rosca, Paul Scarlato, and Kathryn Weidner at Rosca Scarlato are investigating potential options and evaluating potential claims for compensation and/or other redress on behalf of Applied Digital shareholders whose share value dropped following the alleged misrepresentation and/or omissions concerning the independence of Applied Digital’s board of directors and the profitability of its data center hosting business. The Rosca Scarlato attorneys have decades of combined experience representing victims of corporate or financial misconduct.
If you are an Applied Digital investor who has acquired APLD shares before April 2022 are concerned about the drop in the value of your investment, you may contact attorneys Alan Rosca, Paul Scarlato, or Kathryn Weidner to learn more about your rights and for an evaluation of your potential claims, or to provide useful information.
All consultations are free. The Rosca Scarlato attorneys typically take cases like this on a contingency fee basis, advance all case costs, and only get paid for their fees and expenses if and when they are successful, following review and approval by the Court of any fee application.
To reach attorney Alan Rosca or his colleagues, Applied Digital investors may call 888-998-0530, email arosca@rscounsel.law, or leave a message through the contact form on this webpage.
The general considerations on this page are for informational purposes only and do not constitute legal advice. Such legal advice can only be offered once the attorneys discuss each investor’s situation, learn of the relevant facts and can tailor any advice to that investor’s facts. The Applied Digital Class Action Investigation page is not affiliated with Applied Digital. There has not been an adjudication on the merits of any allegations referenced in this blog post, as of the date of the posting.
Contact info:
Rosca Scarlato LLC – 216-946-7070 / 888-998-0530.
Alan Rosca – arosca@rscounsel.law
Paul Scarlato – pscarlato@rscounsel.law
Kathryn Weidner – kweidner@rscounsel.law
Recent Investigations
DISCLAIMER
In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow matters about which we report, and/or to publish subsequent updates regarding various developments that may occur in such matters. Readers are encouraged to conduct their own research regarding any such matters and any developments that may or may not have occurred in such matters. Also, the Brokercheck report linked to some of our blogs is the up-to-date version as of the date of accessing by the reader. The information in our blogs is current as of the date of the drafting of the blog, and given that sometimes certain past complaints may no longer be listed in newer Brokercheck reports, some of the events referenced in some of our blogs may later on be removed from newer Brokercheck reports. Visitors may check the most recent version of each brokercheck report at www.finra.org, and may contact FINRA for the earlier version of the Brokercheck report upon which various blogs may be based.
