NEW YORK, May 4, 2020 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of GSX Techedu Inc. ("GSX" or the "Company") (NYSE: GSX). A complaint has been filed against the Company on behalf of investors that purchased GSX securities, including GSX American Depositary Shares ("ADSs"), between June 6, 2019 and April 13, 2020, inclusive (the "Class Period").
GSX is a technology-driven education company that provides online K-12 after-school tutoring services in China. On June 6, 2019, GSX conducted its initial public offering ("IPO") by issuing 19.8 million ADSs at $10.50 per share.
According to the complaint, on February 25, 2020, Grizzly Research LLC ("Grizzly") published a report highlighting multiple alleged issues with GSX's business and financial operations (the "Grizzly Report"). Specifically, the Grizzly Report alleged, among other issues, that the Company "has been drastically overstating its profitability in its US public filings, especially for 2018"; Grizzly "found multiple strong indications of past and current order 'brushing,'" which are "essentially fake student enrollments to boost student count"; "many of GSX's reported students do not actually exist"; and "[w]hile [GSX] touts its high-quality teacher recruitment mechanism, [Grizzly] found a sign-up website that was not functional, multiple allegations of GSX hiring teachers right out of college with no prior experience, and fabricated teachers profiles."
Following the publication of the Grizzly Report, the price of GSX's ADSs fell $1.33 per share, or 2.93%, to close at $44.09 per ADS on February 25, 2020.
Then, according to the complaint, on April 14, 2020, Citron Research published a report highlighting additional alleged issues with GSX's business and financial operations (the "Citron Report"), including, among other issues, that the Company's "2019 revenue was overstated by 70%," that "sales revenues are largely exaggerated," and that the Company's "filings are riddled with suspicious transactions."
Following publication of the Citron Report, the price of GSX's ADSs fell $0.20 per share, or 0.64%, to close at $31.20 per share on April 14, 2020, 31.3% lower that the closing price prior to the issuance of the Grizzly Report and the Citron Report.
If you are a member of the proposed Class, you may move the court no later than June 16, 2020 to serve as a lead plaintiff for the purported class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to discuss the complaint or our investigation, please contact us by emailing firstname.lastname@example.org or by calling 646-315-9003.
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Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com. If you have any questions about this Notice, your rights, or your interests, please contact:
Donald R. Hall
KAPLAN FOX & KILSHEIMER LLP
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New York, New York 10022
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
1999 Harrison Street, Suite 1560
Oakland, California 94612
Fax: (415) 772-4707
SOURCE Kaplan Fox & Kilsheimer LLP