The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired GSX Techedu Inc. (“GSX” or the Company”) (NYSE:GSX) securities between June 6, 2019, and April 13, 2020, inclusive (the “Class Period”). GSX investors have until June 16, 2020 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On February 25, 2020, Grizzly Research published a report alleging, among other things, that the Company “has been drastically overstating its profitability in its US public filings, especially for 2018” and that Grizzly Research had “found multiple strong indications of past and current order ‘brushing,'” which are “essentially fake student enrollments to boost student count.”
On this news, the price of GSX’s American Depositary Shares (“ADSs”) fell $1.33, or nearly 3%, to close at $44.09 per share on February 25, 2020.
Then, on April 14, 2020, Citron Research issued a report entitled “GSX Techedu Inc – The Most Blatant Chinese Stock Fraud since 2011,” alleging that the Company “is overstating revenue by up to 70% and should immediately halt trading and launch an internal investigation.”
On this news, the price of GSX’s ADSs fell $0.20 per share, or 0.64%, to close at $31.20 on April 14, 2020.
The complaint alleges that throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose: (i) that GSX overstated its profitability, revenue, student enrollment figures, teacher qualifications, and teacher selection process; (ii) that the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Company’s financial results; and (iii) that as a result, the Company’s public statements were materially false and misleading at all relevant times.
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If you purchased GSX securities during the Class Period, you may move the Court no later than June 16, 2020 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased GSX securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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