17 Education & Technology Group Inc.
| Company Name | 17 Education & Technology Group Inc. |
| Stock Symbol | YQ |
| Class Period | December 01, 2020 to July 19, 2022 |
| Lead Plaintiff Motion Deadline | September 19, 2022 |
On December 4, 2020, 17EdTech held its IPO, selling approximately 27,400,000 American Depository Shares (“ADSs”) at $10.50 per ADS.
On July 23, 2021, the Company stated that China’s new regulations regarding after-school tutoring had “not been published, and the Company has not received official notification of the regulations.”
On this news, 17EdTech’s ADS price fell $3.56, or 39%, to close at $5.64 per ADS on July 23, 2021, thereby injuring investors.
Then, on July 26, 2021, the Company announced that the recently published regulations regarding after-school tutoring “will have a material adverse impact on the Company’s results of operations and prospect.”
On this news, 17EdTech’s ADS price fell $1.48, or 26%, to close at $4.16 per ADS on July 26, 2021.
Then, on August 25, 2021, 17EdTech disclosed that “the Company [had] stopped and will stop offering online Academic AST classes over weekends, national holidays and school break periods.”
On this news, 17EdTech’s ADS price fell 5% to close at $4.48 per ADS on August 25, 2021.
Then, on June 9, 2022, after market hours, the Company announced its first quarter financial results, disclosing a net loss of $3.9 million on sales of $36.82 million – a nearly 50% loss in revenue from the previous year.
On this news, the 17EdTech’s ADS price fell $0.65, or 21.3%, to close at $2.40 on June 10, 2022, thereby injuring investors further.
Since the IPO, 17EdTech’s ADSs have traded as low as $1.54 per ADS, representing an 85% decline from the IPO price.
The complaint filed in this class action alleges that the Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors 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’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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