Shareholder rights law firm Robbins LLP announces that it is investigating GSX Techedu Inc. (NYSE: GSX) for alleged violations of the Securities Exchange Act of 1934 and whether the Company's officers and directors breached their fiduciary duties to shareholders. GSX is a technology-driven education company that provides online K-12 after-school tutoring services in the People's Republic of China.
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GSX Techedu Inc. (GSX) Accused of Overstating Its Profitability
In June 2019, GSX touted its rapid growth in student enrollment and profitability and stated that the Company "pride[s] [itself] of [its] rigorous and systematic teacher selection and coaching process" in its initial public offering documents. However, on February 25, 2020, Grizzly Research LLC issued a report alleging GSX "ha[d] been drastically overstating its profitability in its US public filings, especially for 2018" as well as indications that GSX used fake student enrollment mechanisms to boost student count and did not hire teachers using the high-quality recruitment they had touted. Finally, on April 14, 2020, a report published by Citron Research further alleged that GSX's "2019 revenue was overstated by 70%" and that GSX's "filings are riddled with suspicious transactions." Following these disclosures, GSX's stock price had a total decline of 31% to close at $31.20 per share on April 14, 2020.
GSX Techedu Inc. (GSX) Shareholders Have Legal Options
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