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GSX Techedu Inc. (NYSE: GSX) Investor Securities Class Action Lawsuit 04/17/2020

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Lawsuit Overview

Company
GSX Techedu Inc
Security
NYSE: GSX

Case Name
GSX Techedu Shareholder Class Action Lawsuit 04/17/2020
Type of Lawsuit
Shareholder Class Action
Court of Filing
U.S. District Court for the District of New Jersey

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Summary

November 2, 2020 - An amended complaint was filed.

April 17, 2020 - An investor in shares of GSX Techedu Inc. (NYSE: GSX) filed a lawsuit in the U.S. District Court for the District of New Jersey over alleged violations of Federal Securities Laws by GSX Techedu Inc. in connection with certain allegedly false and misleading statements made between June 6, 2019, and April 13, 2020.

China based GSX Techedu Inc., a technology-driven education company, provides online K-12 after-school tutoring services in the People's Republic of China. GSX Techedu Inc. reported that its annual Total Revenue rose from 397.3 million CNY in 2018 to over 2.11 billion CNY in 2019, and that its Net Income increased from 19.65 million CNY in 2018 to 226.63 million CNY in 2019.

Shares of GSX Techedu Inc. (NYSE: GSX) rose from $11.72 per share in September 2019 to as high as $46.4c per share in February 2020.

On April 14, 2020, a report was issued on GSX Techedu Inc. entitled GSX Techedu Inc – The Most Blatant Chinese Stock Fraud since 2011. The Report alleged that GSX Techedu Inc. is overstating revenue by up to 70% and should immediately halt trading and launch an internal investigation.

Shares of GSX Techedu Inc. (NYSE: GSX) declined on April14, 2020 to as low as $28.29 per share.

According to the complaint the plaintiff alleges on behalf of purchasers of GSX Techedu Inc. (NYSE: GSX) common shares between June 6, 2019, and April 13, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between June 6, 2019, and April 13, 2020, the Defendants made false and/or misleading statements and/or failed to disclose that GSX Techedu Inc overstated its profitability, revenue, student enrollment figures, teacher qualifications, and teacher selection process, that the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Company’s financial results, and that as a result, the Company’s public statements were materially false and misleading at all relevant times.