According to the Complaint, GSX Techedu Inc. is a technology-driven education company that provides online K-12 after-school tutoring services in China. The Company also provides a variety of other tutoring courses and services, such as English courses for children in kindergarten, foreign language courses, English test preparation courses for students taking post-graduate entrance exams, professional courses for working adults preparing for professional qualification exams, personal interest courses, and offline business consulting courses. Additionally, the Company operates Weishi, an interactive learning platform on the popular Chinese digital application (“app”) WeChat.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, the Complaint alleges 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.
On August 26, 2020, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on November 2.