Wow, so they have made an even more difficult case for...

Wow, so they have made an even more difficult case for themselves to prove than what I had previously assumed.

People on here mentioning that director sales should be taken as an indication that management knew about forthcoming downgrades. However, now it appears that S&G are well aware that this would not be sufficient grounds to support the allegations (or else they would have referred to it here).

Instead they are going to run with a nonsensical argument, which is that the company embarked on a strategy that they knew with a high degree of certainty would fail. That doesn't even pass the most basic common sense test. Sure, the company made mistakes, but why would you allege that they did so on purpose?

How does one argue this when it is so easy to point out that many other CBEC /daigou related stocks experienced large declines as well.

If I were a claimant in this case I would already be disappointed in S&G's handling. I am not a lawyer here but even the language used in the claim is contradictory. If A2M 'ought to' be aware of something but was not, how can it follow that they have deliberately misled or deceived? Setting aside everything else, that is inherently contradictory.

Then there is the question of whether they actually 'ought to' have known about the specific cross-channel effects of their attempts to stimulate sales. Before COVID-19, neither they nor any other IF company has experienced the particular market conditions and challenges, around logistics, adjusting pricing and inventory levels to meet demand levels that are fluctuating wildly due to lockdown and border closures etc. So good luck proving that one - they should've stuck with a simpler case around the director sales etc. But then I guess that wouldn't have been enough.