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GOTU.US

id: 1583

GSX Techedu (GSX) Investor Settlement

Eligible claimants can submit their claims for compensation.

$9,500,000

Cash Settlement

D. New Jersey

Court

1:20-cv-04457

Case number

06/06/2019

Class period Start

10/20/2020

Class period End

05/30/2026

Claim deadline

GSX Techedu ($TURQUOISE-GSXN) has agreed to a settlement with $GSX investors to resolve claims that it overstated enrollment numbers and revenue, misleading the market about the strength of its online education business.

Outline
Between 2019 and 2020, GSX promoted rapid growth in its K-12 online education platform, citing strong enrollment and revenue gains. However, Grizzly Research, Citron, and Muddy Waters reports revealed that much of the company’s revenue and user data were allegedly fabricated. After this came out, $GSX fell by over 80%, and investors filed suit.


Timeline
June 6, 2019 – GSX completed its IPO, promoting its K-12 online education model.
April 14, 2020 – Citron Research claimed GSX overstated 2019 revenue by 70%.
April 17, 2020 – Investors filed a class action lawsuit.
May 18, 2020 – Muddy Waters reported that over 73% of GSX users were bots. $GSX dropped more than 16%.
August 10, 2020 – A downgrade caused the stock to fall by over 27%.
September 3, 2020 – GSX disclosed an SEC investigation. The stock fell 17.5%.
October 20, 2020 – Reports confirmed overstated revenues. $GSX dropped nearly 30%.
April 2025 – GSX agreed to a settlement with investors.

Background

GSX Techedu launched its IPO in 2019, positioning itself as a leader in China’s K-12 online education space. The company touted rapid growth, highlighting triple-digit revenue increases and rising enrollment figures.

But in early 2020, short-seller reports began to raise red flags. Grizzly Research accused the company of inflating revenue and enrollment data. Citron Research claimed GSX overstated 2019 revenue by 70%. Muddy Waters reported that over 73% of users were bots or operated by third parties.

Although GSX denied the claims, its stock fell sharply after each disclosure. In September 2020, the company confirmed it was under SEC investigation. On October 20, reports confirmed that GSX’s revenue figures had been significantly overstated, sending the stock down nearly 30% in one day. Overall, $GSX lost more than 80% of its value from peak levels. On April 17, 2020, investors filed a class action lawsuit.


What Can Investors Expect Now?

GSX Techedu has agreed to a settlement with $GSX investors to resolve claims that it overstated enrollment numbers and revenue, misleading the market about the strength of its online education business.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.

Case Type

US Securities Class Action

Case Status

Accepting Claims

Alleged Offence

Misleading Statements,

Fraud

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Payout per Share

0.2

Filing date

04/17/2020

Plaintiffs

Donat Zajontz

Attorneys

Pomerantz LLP ; Bragar Eagel & Squire, P.C.

Defendants

Larry Xiangdong Chen ; Nan Shen

Judge

Jed S. Rakoff

Administrator

JND Legal Administration

Court hearing date

06/04/2026

Exclusion deadline

05/28/2026

Objection deadline

05/28/2026

Attorney fee

$3,663,500

Trades matching type

FIFO

Frequently Asked Questions

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