5 frequently asked qUESTIONS about the Applied Digital Corporation Class Action Lawsuit

If you suffered losses in Applied Digital contact Applied Digital stock loss lawyer Timothy L. Miles about an Applied Digital lawsuit

​The Applied Digital class action lawsuit seeks to represent purchasers or acquirers of Applied Digital Corporation (NASDAQ: APLD) securities between April 13, 2022 and July 26, 2023, inclusive (the “Class Period”).  Captioned McConnell v. Applied Digital Corporation, No. 23-cv-01805 (N.D. Tex.), the Applied Digital class action lawsuit charges Applied Digital and certain of its top executive officers with violations of the Securities Exchange Act of 1934.
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If you suffered losses in Applied Digital stock and wish to serve as lead plaintiff in the class action against Applied Digital, or just have general questions, please provide your information below. You can also ​contact Applied Digital Stock Loss Lawyer Timothy L. Miles by calling 855/846-6529 or via e-mail at [email protected]. Lead plaintiff motions for the Applied Digital lawsuit must be filed with the court no later than October 11, 2023.

ALLEGATIONS IN THE APPLIED DIGITAL ACTION LAWSUIT

Applied Digital designs, develops, and operates datacenters in North America, and provides artificial intelligence (“AI”) cloud services, computing datacenter hosting, and crypto datacenter hosting services.  In April 2022, Applied Digital conducted its initial public offering (“IPO”), raising approximately $40 million.  The IPO offering documents described several close connections between Applied Digital and B. Riley Securities (the primary IPO underwriter), including that in August 2021, Applied Digital’s CEO and defendant Wesley Cummins sold a majority interest in a registered investment adviser controlled by Cummins to B. Riley Financial, and thereafter became President of B. Riley Asset Management.

The Applied Digital class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Applied Digital had overstated the profitability of its datacenter hosting business and its ability to successfully transition into a low-cost AI cloud services provider; (ii) Applied Digital’s Board of Directors was not independent within the meaning of NASDAQ listing rules; (iii) accordingly, Applied Digital had overstated the efficacy of its business model and failed to maintain proper corporate governance standards; and (iv) the above, once revealed, was likely to subject Applied Digital to significant financial and/or reputational harm.

On July 6, 2023, market analysts Wolfpack Research and The Bear Cave published short reports on Applied Digital.  The Wolfpack report raised questions about the viability of Applied Digital’s business model, stating that Applied Digital “pumped up its stock in May by claiming to pivot from a floundering business hosting bitcoin miners, to become a low-cost AI Cloud service provider,” and “[t]he explosion of interest in AI after the emergence of Chat GPT has predictably attracted the worst promoters . . . to peddle fake AI wares to credulous investors, and our analysis indicates that [Applied Digital] is one of these grifters because it is not an AI company.”  The Bear Cave report detailed Applied Digital’s problematic corporate history, alleging 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.”  On this news, the price of Applied Digital stock fell more than 14%.

Then, on July 26, 2023, The Friendly Bear published a short report on Applied Digital and expressed the view that B. Riley “is controlling managerial decisions at Applied Digital to the detriment of Applied Digital shareholders” and that Applied Digital’s Board of Directors does not “meet[] the independence requirements under Nasdaq rules and . . . is essentially controlled by B. Riley.”  The Friendly Bear report also alleged that clear conflicts of interest undermined Applied Digital’s purported investigation into sexual harassment claims made against defendant Cummins the previous month, noting that the manner in which the claims were summarily dismissed by Applied Digital’s Audit Committee could subject Applied Digital to “significant legal blowback.”  On this news, the price of Applied Digital stock fell 6% over two trading sessions, further damaging investors who suffered losses in Applied Digital stock.

Read on for answers to five frequently asked questions about the Applied Digital class action lawsuit. 

WHAT IS THE LEAD PLAINTIFF PROCESS IN THE APPLIED DIGITAL CLASS ACTION LAWSUIT?

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased and suffered losses in Applied Digital stock to seek appointment as lead plaintiff in the Applied Digital class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. 
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​A lead plaintiff acts on behalf of all other class members in directing the class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the securities class action lawsuit.  An investor’s ability to share in any potential future recovery of the class action lawsuit is not dependent upon serving as lead plaintiff. If you suffered losses in Applied Digital stock, and have further questions, contact Applied Digital stock loss Lawyer Timothy L. Miles today who will fight to recover your damages in a Applied Digital lawsuit if you suffered losses in Applied Digital stock.

IF I SUFFERED LOSSES IN APPLIED DIGITAL STOCK, WHAT ARE THE BENEFITS OF SERVING AS LEAD PLAINTIFF IN THE CLASS ACTION AGAINST APPLIED DIGITAL?

Serving as a Lead Plaintiff in the Applied Digital lawsuit has several advantages and important benefits including:

• A Lead Plaintiff is able to negotiate more competitive attorney fees and reduce other litigation costs by actively monitoring the class counsel.
• Lead Plaintiff has the benefit of being able to manage the litigation primarily by overseeing and monitoring the progress of the action and the efforts of counsel, and being able to review and comment on important filings and other documents pertaining to the prosecution of the action.
• There is no financial risk in serving as a Lead Plaintiff because Lead Counsel advances all costs and expenses incurred it the prosecution of the case and will be reimbursed only if there is a successful settlement or judgment recovery on behalf of the class.
• Lead Plaintiff has the benefit involved and active in all negotiations relating to any settlement.
• Lead Plaintiffs that continue owning the stock of the defendant will enjoy the long-term benefits from governance reform resulting from the litigation. 

Thus, there are numerous benefits to serving as lead plaintiff in a class action against Applied Digital if you suffered losses in Applied Digital stock. ​

HOW WAS THE CLASS PERIOD DETERMINED IN THE CLASS ACTION AGAINST APPLIED DIGITAL?

In a securities fraud class action, the class period refers to a period of time in which it is alleged the price of the company’s stock was artificially inflated due to false and misleading statements made by company executives.  The class period starts when the company makes an untrue statement of material fact about the company or fails to disclose a material fact necessary to render other statements not misleading.  The class period ends when the truth is revealed to the investing public through a corrective disclosure.  
 
In order to be a part of the class in the Applied Digital class action lawsuit, you must have suffered losses in Applied Digital stock by purchasing during the class period when it is alleged the price of the stock was artificially inflated to be included in the class action against Applied Digital.  ​

HOW CAN AN APPLIED DIGITAL STOCK LOSS LAWYER HELP ME IF I SUFFERED LOSSES IN APPLIED DIGITAL STOCK?

​​​​​An Applied Digital stock loss Lawyer is well-versed in the complex laws that govern the securities industry and litigation and focuses on representing individual investors or funds who have been the victims of fraud or who have disputes with investment professionals. Ordinary individual investors, including civil servants, teachers, nurses, and retirees, may need a securities lawyer. In most cases, if they have lost money due to mistakes, incompetence, or fraud by an investment professional. While FINRA, the SEC, and state securities regulators serve a vital role in protecting investors, they simply have too many individuals, firms, and market transactions to monitor to discovery every act of fraud or negligence. Individual investors should consult with a securities lawyer if they have lost money due to fraud or stockbroker misconduct. Contact an Applied Digital stock loss Lawyer today if you suffered losses in Applied Digital ​stock about the Applied Digital class action lawsuit who will fight to recover your suffered losses in Applied Digital stock.

IF I SUFFERED LOSSES IN SUFFERED LOSSES IN APPLIED DIGITAL STOCK, WHEN CAN I EXPECT TO RECEIVE MY PAYMENT IF THE CLASS ACTION AGAINST APPLIED DIGITAL SETTLES?

​If there is a settlement in the Applied Digital ​lawsuit, you should receive a court ordered Notice through the mail which will provide a date when the court will hold a final hearing to decide if it will approve the settlement. If your address changed, you may also find lawsuits through sites such as Consumer Action and ClassAction.org along with instructions on how to submit a claim. The Notice will instruct you what you need to do to file a claim. In some class action settlements, you are automatically submitted and need to do nothing further. However, in others, you may be required to submit more information to proceed such as documentation proving your purchase, such as a receipt or brokerage slip or other evidence that you bought or sold Proterra stock during the class period and suffered losses in Applied Digital stock.
 
The court will hold a final hearing in the class action against Applied Digital on a date provided in the Notice to decide whether to finally approve the settlement. If the Court finally approves the settlement, and there are no objections or appeals, settlement payments will be mailed to all Participating Class Members within a few months. However, if there are objections or appeals, resolving them can take a significant amount of time, perhaps more than a year to resolve the Applied Digital lawsuit. ​

CONTACT AN APPLIED DIGITAL STOCK LOSS LAWYER TODAY IF YOU SUFFERED IN LOSSES IN APPLIED DIGITAL STOCK ABOUT AN APPLIED DIGITAL CLASS ACTION LOSSES LAWSUIT

​If you suffered losses in Applied Digital stock, contact Applied Digital stock loss lawyer Timothy L. Miles today for a free case evaluation about a class action against Applied Digital. Call today and see what an Applied Digital stock loss lawyer can do for you if you suffered losses in Applied Digital stock.

Applied Digital stock loss lawyer Timothy L. Miles

​​​Nashville attorney Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Mr. Miles has dedicated his career to representing  shareholders, employees,  and consumers in complex class-action litigation. Whether serving as lead, co-lead, or liaison counsel, Mr. Miles has helped recover hundreds of millions of dollars for defrauded investors,shaped precedent-setting decisions, and delivered real corporate governance reforms. Judges and peers have repeatedly recognized Mr. Miles’ relentless advocacy for the underdog, as well as his unbendable ethical standards. Mr. Miles was recently selected by Martindale-Hubbell® and ALM as a 2022 Top Ranked Lawyer, 2022 Top Rated Litigator. and a 2022 Elite Lawyer of the South. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association,​Class Action:  Class Action: Top 9National Trial Lawyers, National Trial Lawyers Association (2023), a superb ratedattorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019); a Top Rated Litigator by Martindale-Hubbell® and ALM  (2019-2022); America’s Most Honored Lawyers 2020 – Top 1% by America’s Most Honored (2020-2022).  Mr. Miles has published over sixty articles on various issues of the law, including class actions, whistleblower cases, products liability, civil procedure, derivative actions, corporate takeover litigation, corporate formation, mass torts, dangerous drugs, and more.  Please visit our website or call for free anytime.

CONTACT                                                      
The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
​300 Centerview Dr., #247
Brentwood, TN 37027
Phone: (855) 846-6529
​Email: [email protected]