Alibaba Group (BABA, Financial) has announced a settlement agreement in a U.S. class-action lawsuit previously disclosed. The company has agreed to a $433.5 million payout to settle claims of monopolistic behavior. This settlement applies to investors who held Alibaba American Depositary Shares between November 13, 2019, and December 23, 2020, addressing their compensation demands.
While denying any wrongdoing, Alibaba stated that the settlement aims to avoid further litigation costs and disruption. The proposed settlement has been submitted to the Manhattan Federal Court and awaits approval from U.S. District Judge George Daniels. Lawyers for the plaintiffs described the settlement as an "extraordinary result," significantly exceeding the median compensation in securities class-action lawsuits, which often surpass $10 billion in investor losses. If the case continued, investors could have sought up to $11.63 billion in damages.
Typically, companies settle class-action lawsuits to save time and resources, allowing them to focus on business growth and investor protection. Similar settlements have been reached by other U.S.-listed Chinese companies like Pinduoduo, JD.com, and Baidu facing overseas shareholder lawsuits.
As of October 25, Alibaba's stock closed at $97.42 per share, with a market capitalization of $233.3 billion.
