CORRECTED – Mecox Lane shares fall after investors sue

(Corrects fourth bullet point to show that Mecox Lane shares
are trading 36.2 percent below their IPO price, not 9.6 below
their IPO price)

* Mecox says aware of at least one class action complaint

* Says complaint has no merit, will defend “vigorously”

* Shares fall as much as 38.7 percent below IPO price

* Shares trading 36.2 percent below IPO price at midday

By Clare Baldwin

NEW YORK, Dec 6 (BestGrowthStock) – Shares of Mecox Lane (MCOX.O: )
fell as much as 38.7 percent below their initial public
offering price on Monday after U.S. shareholders filed two
class-action lawsuits against the online retailer.

The shares fell as low as $6.74 on the Nasdaq before
recovering to trade at $7.02, or 36.2 percent below their $11
IPO price at midday.

Mecox Lane, a China-based online retailer, went public on
the Nasdaq in late October. A class action lawsuit filed by
Kahn Swick & Foti has charged Mecox Lane directors, its chief
financial officer and underwriters with failing to conduct
adequate due diligence before the IPO.

The lawsuit says that Mecox Lane failed to disclose that
its third-quarter gross margins had shrunk because of increased
costs and expenses.

A second class action lawsuit filed by The Rosen Law Firm
also alleged that Mecox Lane’s officers, directors, and others
should have disclosed that the company’s gross margins had been
hurt by increased costs and expenses.

The Kahn Swick & Foti lawsuit was filed on Friday evening.
The Rosen lawsuit was filed on Saturday.

Shares of Mecox Lane fell last week after the company
announced third-quarter results. The company reported higher
quarterly revenue and profit, but said its gross margin had
fallen to 39.7 percent from 43.7 percent a year earlier.
[ID:nSGE6AT0E7]

Mecox Lane said in a statement on Monday that it was aware
that at least one class action complaint has been filed, but
said it has not been served with a copy of any complaint. It
said that the complaint was without merit. It did not say which
complaint it was referring to.

“The company does not believe that any such lawsuit will
have any material impact on its normal daily operations,” Mecox
Lane said in a statement.

The company sells clothing and accessories to young, urban
women and operates the website M18.com. On Oct. 25, the company
and investors sold 11.74 million American Depositary Shares for
$11 each, raising about $129.17 million. It had planned to sell
shares for $8 to $10 each.

Underwriters on the IPO were led by Credit Suisse and UBS
Investment Bank.
(Reporting by Clare Baldwin. Editing by Robert MacMillan)

CORRECTED – Mecox Lane shares fall after investors sue