Robbins Geller Rudman & Dowd LLP announces that purchasers or acquirers of Gaotu Techedu Inc. f/k/a GSX Techedu Inc. (NYSE: GOTU) American depository shares (“ADSs”) between March 5, 2021 and July 23, 2021, inclusive (the “Class Period”) have until February 28, 2023 to seek appointment as lead plaintiff in the Gaotu class action lawsuit. Captioned Zhang v. Gaotu Techedu Inc. f/k/a GSX Techedu Inc., No. 22-cv-07966 (E.D.N.Y.), the Gaotu class action lawsuit charges Gaotu and certain of its top executives with violations of the Securities Exchange Act of 1934.
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CASE ALLEGATIONS: Gaotu purports to be a technology-driven education company, providing online K-12 after-school tutoring services in the People’s Republic of China.
The Gaotu class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) 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; and (ii) the impact such regulations would have on Gaotu’s operations and profitability and the value of Gaotu securities.
On July 23, 2021, Reuters reported that “China is barring tutoring for profit in core school subjects to ease financial pressures on families that have contributed to low birth rates, news that sent shockwaves through its vast private education sector and share prices plunging.” The article added that “[a]ll institutions offering tutoring on the school curriculum will be registered as nonprofit organisations, and no new licences will be granted, according to the document, which says it was distributed by China’s State Council, or cabinet, to local governments and is dated July 19.” On this news, the price of Gaotu ADSs fell by more than 63%, damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased or otherwise acquired Gaotu ADSs during the Class Period to seek appointment as lead plaintiff in the Gaotu class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Gaotu class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Gaotu class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the Gaotu class action lawsuit.
ABOUT ROBBINS GELLER: Robbins Geller is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm is ranked #1 on the most recent ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors in 2021 – more than triple the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 9 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. Please visit the following page for more information:
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