Gaotu Techedu Inc.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of those who acquired Gaotu Techedu Inc. (“Gaotu” or the “Company”) (NYSE: GOTU) securities from March 22, 2021 through March 29, 2021, inclusive (the “Class Period”). Investors have until December 20, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Gaotu is a technology-driven education company and online large-class after-school tutoring service provider in China.
Both Goldman Sachs and Morgan Stanley are global financial services institutions that served as prime brokers for Archegos Capital Management (“Archegos”), a family office with $10 billion under management, helping Archegos make trades and lending it capital in the form of margin lending.
During the week of March 22, 2021, Defendants sold a large number of Gaotu shares while in possession of material, non-public information. According to subsequent media reports, Defendants unloaded large block trades late Thursday, March 25, 2021, before the Archegos story reached the public, consisting of shares of Archegos’ doomed bets, including billions worth of Gaotu securities, sending Gaotu’s stock into a complete tailspin. On this news, the Company’s share price declined by approximately 62% during the week of March 22, 2021 to March 29, 2021.
The lawsuit alleges throughout the Class Period, Goldman Sachs and Morgan Stanley sold a large amount of Gaotu shares during the Class Period while in possession of material, non-public information about Archegos and its need to fully liquidate its position in the Company because of margin call pressure. As a result of these sales, Defendants Goldman Sachs and Morgan Stanley avoided billions in losses combined.