GSX Techedu (GSX) Investor Settlement
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.
Frequently Asked Questions
All persons and entities that purchased or otherwise acquired the publicly traded American Depositary Shares (ADSs) of GSX Techedu Inc. (now Gaotu Techedu Inc.) between June 6, 2019 and October 20, 2020, inclusive, including those who purchased ADSs in or traceable to the Company’s June 6, 2019 IPO or the November 20, 2019 SPO, and were damaged thereby
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
The final payout amount depends on your specific trades and the number of investors participating in the settlement.
If 100% of investors file their claims - the average payout will be $0.20 per share. Although typically only 25% of investors file claims, in this case, the average recovery will be $0.80 per share.
11th.com is an investor recovery company that helps investors track and collect securities class action settlements. We will:
1. Prepare documents for your payout.
2. Audit the claim and make sure you get the maximum possible payout.
3. File a claim with the settlement administration.
4. Correspond with the settlement administration to resolve emerging issues.
5. Deliver payout directly to your brokerage account.
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.