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GDS Holdings Avoids Investor Suit Based on Short Seller Report

April 8, 2020, 6:19 PM

GDS Holdings Ltd. successfully fought off a would-be class action based on a short seller report alleging fraud after a New York federal district judge shut down the suit.

The China-headquartered data center firm’s investors accused it of misleading them about the revenue and value of some centers it acquired. But they didn’t properly allege that GDS or its leadership had the intent necessary for fraud liability, the U.S. District Court for the Southern District of New York said Tuesday.

The investors based their allegations on a 2018 report from Blue Orca Capital, which acknowledged it had a short interest...

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