NEW YORK, July 27, 2022 (GLOBE NEWSWIRE) — Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of 17 Education & Technology Group Inc. (“17EdTech” or “Company”) (NASDAQ: YQ). A complaint has been filed on behalf of purchasers or acquirers of 17EdTech publicly traded securities pursuant and/or traceable to the registration statement and related prospectus issued in connection with 17EdTech’s December 4, 2020 initial public offering (“IPO”).
17EdTech operates as an education technology company and serves customers in the People’s Republic of China (“PRC”). The Company offers data-driven teaching, learning, and assessment products to teachers, students, and parents with online tutoring courses and in-school classroom solutions. On December 4, 2020 the Company conducted its IPO and issued approximately 27.4 million American Depositary Shares (“ADSs”) to the investing public at $10.50 per ADS.
On July 23, 2021 the Company announced “the PRC regulators are considering a new set of regulations concerning after-school tutoring service. . . .” Following this news, the Company’s stock dropped over 38% to close at $5.64 per ADS on July 23, 2021.
Three days later on June 26, 2021, the Company announced that it expects the relevant PRC regulations and “compliance measures to be taken by the Company will have a material adverse impact on the Company’s results of operations and prospect.” On this news, the ADSs fell $1.48 per ADS, about 26%, to close at $4.16 per ADS on July 26, 2021.
Finally, on June 9, 2022 after market hours, the Company announced its first quarter financial results reporting a net loss of US $3.9 million and a more than 50% fall in revenue from the prior year to US $36.82 million. On this news, 17EdTech ADSs fell $0.65 per share or over 21% to close at $2.40 per ADS on June 10, 2022.
The Complaint alleges that the Registration Statement was negligently prepared, and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading. Among other things, the Complaint alleges that the Company neglected to raise the real and existential concerns about the ongoing discussions and action of Chinese authorities related to the Company’s K-12 education services. Further, the Complaint alleges that the Registration Statement failed to disclose that the Company’s K-12 Academic AST Services would end less than a year after the IPO and that Chinese authorities would imminently curtail and/or end its core business.
If you are a member of the proposed Class, you may move the court no later than September 19, 2022 to serve as a lead plaintiff for the purported class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to discuss the complaint or our investigation, please contact us by emailing email@example.com or by calling (646) 315-9003.
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