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17 Education & Technology Group Inc.

Company Name17 Education & Technology Group Inc.
Stock SymbolYQ
Class PeriodDecember 01, 2020 to July 19, 2022
Lead Plaintiff Motion DeadlineSeptember 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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