Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Gaotu Techedu Inc. f/k/a GSX Techedu Inc. (“Gaotu” or the “Company”) (NYSE: GOTU) American depository shares (“ADSs”) between March 5, 2021 and July 23, 2021, inclusive (the “Class Period”). Gaotu investors have until February 28, 2023 to file a lead plaintiff motion.
Investors suffering losses on their Gaotu investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to howardsmith@howardsmithlaw.com.
On July 23, 2021, Reuters reported that China was barring for-profit tutoring programs, citing a government document that was widely circulated. The regulatory move “threatens to decimate the $120 billion private tutoring industry.”
On this news, Gaotu’s ADS price fell 63.3%, to close at $3.25 per ADS on July 23, 2021, thereby injuring investors.
Then, on November 6, 2021, the Financial Times published an article alleging, among other things, that Gaotu leaders had been aware that Beijing was considering stricter regulations on the tutoring industry. The article also reported that a shell company holding shares for Gaotu’s executives sold $119 million worth of shares days after the Chinese president remarked that home-schooling was a “stubborn disease” that was putting too much pressure on Chinese children and their parents.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) China was barring tutoring for profit in core school subjects and the policy change would restrict foreign investment in a sector that had become essential to success in Chinese school exams; (2) the impact such regulations would have on Gaotu’s operations and profitability and the value of Company securities; and (3) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
If you purchased Gaotu 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 Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at www.howardsmithlaw.com.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20230105005274/en/
Contacts
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
215-638-4847
888-638-4847
howardsmith@howardsmithlaw.com
www.howardsmithlaw.com
