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17 Education & Technology Group Inc.


The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of those who acquired 17 Education & Technology Group Inc. (“17EdTech”) (NASDAQ: YQ) securities pursuant and/or traceable to the registration statement and related prospectus (collectively, the “Registration Statement”) issued in connection with 17EdTech December 2020 initial public offering (the “IPO” or “Offering”). Investors have until September 19, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit. 
 
17EdTech is a leading education technology company in the People’s Republic of China (“PRC”) which provides K-12 education services in the PRC, including with an “in-school + after-school” integrated model which provides a smart in-school classroom solution that delivers data-driven teaching, learning and assessment products.
 
On December 4, 2020, 17EdTech filed with the SEC the final prospectus for the IPO on Form 424B4 (the “Prospectus”), which forms part of the Registration Statement. In the IPO, 17EdTech sold 27,400,000 American Depositary Shares (“ADSs”) at $10.50 per ADS.
 
On July 23, 2021, the Company issued a press release which announced that “the PRC regulators are considering a new set of regulations concerning after-school tutoring service related to school subjects taught in China’s compulsory education system.” On this news, 17EdTech ADS price declined by $3.56 per ADS, or approximately 38.70%, from $9.20 per ADS to close at $5.64 per ADS on July 23, 2021.
 
On July 26, 2021, the Company issued a press release which announced that the relevant PRC government regulations will have a material adverse impact on the Company’s results of operations and prospect. On this news, 17EdTech ADS price declined by $1.48 per ADS, or approximately 26.24%, from $5.64 per ADS to close at $4.16 per ADS on July 26, 2021.
 
On August 25, 2021, the Company issued a press release which announced “In compliance with the Shanghai Measures, the Company has stopped and will stop offering online Academic AST classes over weekends, national holidays and school break periods.” On this news, 17EdTech ADS price declined by $0.24 per ADS, or approximately 5.08%, from $4.72 per ADS to close at $4.48 per ADS on August 25, 2021.
 
On June 9, 2022, after market hours, the Company issued a press release which announced poor financial results due to “the cessation of the Company’s online K-12 tutoring services by the end of 2021 in order to be compliant with the latest PRC regulations.” On this news, 17EdTech ADS price declined by $0.65 per ADS, or approximately 21.31%, from $3.05 per ADS to close at $2.40 per ADS on June 10, 2022.
 
On July 19, 2022, the day the suit was filed, 17EdTech ADSs closed at $1.53 per ADS.
 
The lawsuit alleges throughout the Class Period the Registration Statement and Defendants made false and/or misleading statements and/or failed to disclose that: (1) Defendant 17EdTech’s K-12 Academic AST Services would end less than a year after the IPO; (2) as part of its ongoing regulatory efforts, Chinese authorities would imminently curtail and/or end 17EdTech’s core business; and (3) as a result, Defendants’ statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
 

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