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Gaotu Techedu 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 Eastern District of New York on behalf of those who acquired Gaotu Techedu Inc. (“Gaotu”) (NYSE: GOTU) securities between March 5, 2021 through July 23, 2021 (the “Class Period”). Investors have until February 28, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
 
Gaotu develops educational software, offering online K-12 large-class after-school tutoring as well as foreign language, professional, and other courses.
 
On July 23, 2021, Reuters reported that: “China is barring tutoring for profit in core school subjects . . . news that sent shockwaves through its vast private education sector and share prices plunging . . . . The move threatens to decimate China's $120 billion private tutoring industry and triggered a heavy selloff in shares of tutoring firms traded in Hong Kong and New York including New Oriental Education & Technology Group and Koolearn Technology Holding Ltd.” On this news, the price of Gaotu shares declined by $6.06, or approximately 63.26%, from $9.58 per share to close at $3.52 on July 23, 2021.
 
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose 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; and (2) the impact such regulations would have on Gaotu’s operations and profitability and the value of Company securities.
 

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