On October 25th local time in the United States, Alibaba Group announced that it has agreed to pay $433.5 million (approximately 3.087 billion yuan) to settle a class action lawsuit filed by investors in the United States.
The lawsuit accuses Alibaba of monopolistic behavior, but Alibaba denies any wrongdoing and emphasizes that the settlement is only to avoid the costs and interference of further litigation.
This proposed settlement agreement has been submitted to the Manhattan Federal Court and requires approval from U.S. District Judge George Daniels.
The settlement agreement covers investors who held Alibaba US stocks from November 13, 2019 to December 23, 2020. The plaintiff's lawyer stated in court documents that the proposed agreement is an "extraordinary achievement" that far exceeds the average compensation amount in securities class action cases where investors have suffered losses exceeding $10 billion.
The lawyer emphasized that if the lawsuit continues, Alibaba investors may receive up to $11.63 billion (approximately RMB 82.881 billion) in compensation.
It is reported that for the defendant, in order to avoid lengthy litigation involving the company's time and energy, better focus on developing business, and protect the interests of investors, it is often the main reason for settling class action lawsuits. For similar considerations, the vast majority of defendants in class action lawsuits in the United States will pay settlement fees to end the litigation. Many Chinese concept stock companies listed in the United States have encountered or are currently facing class action lawsuits from overseas shareholders.
As of the close of October 25th Eastern Time, Alibaba's stock price was $97.42 per share, up 1.10%, with a market value of $233.3 billion (approximately RMB 166 trillion).
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