As shocking as the title sounds, it can’t be further from the truth as CD Projekt executives received disturbing news on the very eve of Christmas. Two different law firms, the NYC-based Rosen Law Firm, and the LA-based The Schall Law Firm filed class-action lawsuits against CD Projekt alleging that the studio misinformed investors in regards to the newly released Cyberpunk 2077.
According to one of the Law firms, precisely The Schall Law Firm, there were violations of the 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 made public by the U.S. Securities and Exchange Commission.
A class-action lawsuit has been filed against CD Projekt claiming that the publisher "made false and/or misleading statements" about Cyberpunk 2077's performance. https://t.co/EscN8XI9Qc pic.twitter.com/DUOeKL99Y4
— IGN (@IGN) December 25, 2020
Take a look at an excerpt from the lawsuit filings below:
According to the Complaint, the Company made false and misleading statements to the market. CD Projekt’s hotly-anticipated video game “Cyberpunk 2077” was essentially unplayable on current-generation Xbox and PlayStation consoles due to an overwhelming number of bugs and other problems. Sony, Microsoft, and the Company were forced to offer refunds to customers who bought “Cyberpunk 2077,” resulting in Sony removing the game from its PlayStation Store. The Company’s reputation was harmed significantly by the botched launch of “Cyberpunk 2077.” Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about CD Projekt, investors suffered damages.
Also, the press release sent out by Rosen Law Firm features a synonymous statement:
According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Cyberpunk 2077 was virtually unplayable on the current-generation Xbox or PlayStation systems due to an enormous number of bugs; (2) as a result, Sony would remove Cyberpunk 2077 from the PlayStation Store, and Sony, Microsoft and CD Projekt would be forced to offer full refunds for the game; (3) consequently, CD Projekt would suffer reputational and pecuniary harm; and (4) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
The lawsuits came as a result of investors purchased CD Projekt’s stock between January 16th to December 17th, 2020 thinking the value of the stock would have spiked due to the information given to them, which turned out false.
Surprisingly, both Law Firms created an online case form for those affected. However, they will have to contact Rosen Law Firm and The Schall Law Firm before the end of February next year, precisely on February 22nd.
In retrospect, the very same law firm filed class-action lawsuits against Activision Blizzard after the organization split with Bungie in early 2019. Yet, no updates have been released on those lawsuits.
Look for future updates on the CD Projekt case as it unfolds.