A class action lawsuit was filed against Innodata, Inc. (NASDAQ:INOD) on February 21, 2024. The plaintiffs (shareholders) alleged that they bought Innodata’s stock at artificially inflated prices between May 9, 2019 and February 14, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought INOD stock during that period can learn about joining the lawsuit here: https://zlk.com/pslra-1/innodata-lawsuit-submission-form?wire=16
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Innodata is a global data engineering company that provides artificial intelligence (AI)-powered software platforms and managed services for AI data collection/annotation, AI digital transformation, and industry-specific business processes.
The plaintiffs maintain that the company and three of its current and/or former senior officers have deceived investors by repeatedly lying and withholding crucial information about the company’s business during the Class Period.
The truth was revealed on February 15, 2024, when a Wolfpack Report alleged that Innodata’s customers were using the company’s services for cheap labor, with its operations backed by low-wage offshore workers and not any proprietary AI technology. The report supported its allegations by stating that Innodata had spent very little amount on research and development in the past five years, in contrast to its claims.
Interestingly, during the prior earnings calls, the company mentioned the progress on its AI platform and how the technology was helping customers automate their processes. Moreover, Innodata claimed that its Goldengate platform “serves up no-code AI with transfer learning built on generative language models we have developed over the past five years of deploying industrial deep neural networks.”
As per the class action lawsuit, Innodata caused INOD stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about its AI technology.
Notably, on February 15, INOD stock collapsed over 31%, causing massive damage to shareholders’ returns.
