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GAOTU TECHEDU INC.

(GOTU)
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DEADLINE ALERT: Bragar Eagel & Squire, P.C. Reminds Investors That a Class Action Lawsuit Has Been Filed Against GSX Techedu, Inc. and Encourages Investors to Contact the Firm

06/10/2020 | 07:01pm EDT

Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that a class action lawsuit has been filed in the United States District Court for the District of New Jersey on behalf of investors that purchased GSX Techedu, Inc. (NYSE: GSX) securities between June 6, 2019 and April 13, 2020 (the “Class Period”). Investors have until June 16, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

Click here to participate in the action.

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 publication of the Grizzly Report, GSX’s share price fell $1.33 per share, or 2.93%, to close at $44.09 per share on February 25, 2020.

Then, on April 14, 2020, Citron Research (“Citron”) 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 the publication of the Citron Report, GSX’s share price fell $0.20 per share, or 0.64%, to close at $31.20 per share on April 14, 2020.

The complaint, filed on April 17, 2020, alleges that throughout the Class Period defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) GSX overstated its profitability, revenue, student enrollment figures, teacher qualifications, and teacher selection process; (ii) the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Company’s financial results; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.

If you purchased GSX securities during the Class Period, have information, 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 Melissa Fortunato or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.

About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.


ę Business Wire 2020
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Financials
Sales 2021 10 446 M 1 619 M 1 619 M
Net income 2021 -2 103 M -326 M -326 M
Net cash 2021 3 802 M 589 M 589 M
P/E ratio 2021 -8,19x
Yield 2021 -
Capitalization 21 423 M 3 320 M 3 320 M
EV / Sales 2021 1,69x
EV / Sales 2022 1,09x
Nbr of Employees 22 570
Free-Float 92,8%
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Technical analysis trends GAOTU TECHEDU INC.
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TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 12
Average target price 240,40 CNY
Last Close Price 83,82 CNY
Spread / Highest target 640%
Spread / Average Target 187%
Spread / Lowest Target -8,39%
EPS Revisions
Managers and Directors
NameTitle
Xiang Dong Chen Chairman & Chief Executive Officer
Nan Shen Chief Financial Officer
Fan Xin Independent Director
Yiming Hu Independent Director
Ming Liao Independent Director
Sector and Competitors