A shareholder of CD Projekt S.A. sued the company and three of its executives on Dec. 24 for securities violations after its stock price plunged earlier in December. The complaint alleged that in the months leading up to the belated debut of its game Cyberpunk 2077, the Polish video game developer misled investors about the game’s readiness and playability.
The filing explained that CD Projekt develops and digitally distributes video games worldwide. Reportedly, CD Projekt’s public shares, both American Depository Receipts (ADRs) and ordinary shares, trade on the OTC Pink.
The complaint stated that the company dedicated significant resources to the development of Cyberpunk 2077 in the last several years. It reportedly expected to release the game on popular consoles including Sony’s PlayStations and Microsoft’s Xboxes. The plaintiff contended that during the buildup to the game’s release, the company and individual defendants repeatedly assured investors that the development was progressing as planned for release on April 17.
In January, the plaintiff alleged, four months prior to the scheduled debut, CD Projekt told the public that although the game was ready to be played, it was postponing the release until September 7, to “‘finish playtesting, fixing and polishing.’” The defendant, however, did not release the game until Dec. 10, the complaint explained.
When finally released, the plaintiff claimed, game players soon discovered that Cyberpunk 2077 was full of errors which rendered the game virtually unplayable. The plaintiff argued that the defendants failed to disclose the game’s flaws and its console incompatibility, forcing its removal from the PlayStation store, and Sony, Microsoft, and CD Projekt to offer full refunds to purchasers.
The plaintiff claimed that as a result of the company’s concealment, its shareholders suffered the consequences. Between the close of trading on December 9 and December 18, the complaint contended, CD Projekt’s ADRs fell more than 40%, and its ordinary shares dropped by just over 30%. The plaintiff seeks to certify a class of shareholders who purchased or otherwise acquired the company’s publicly traded shares from January 16 to December 17 and to recover damages as provided by federal securities laws.
The plaintiff is represented by The Rosen Law Firm, P.A.
