Zhangmen Education Inc. (NYSE:ZME) Investor Alert: Lawsuit Alleges Securities Laws Violations
A lawsuit was filed on behalf of investors in Zhangmen Education Inc. (NYSE:ZME) shares over alleged securities laws violations.
San Diego, CA -- (SBWire) -- 12/14/2021 --An investor, who purchased shares of Zhangmen Education Inc. (NYSE: ZME), filed a lawsuit over alleged Securities Laws violations by Zhangmen Education Inc. in connection with the initial public offering of Zhangmen Education held in or about June 8, 2021 ("IPO").
Investors who purchased shares of Zhangmen Education Inc. (NYSE: ZME) have certain options and for certain investors are short and strict deadlines running. Deadline: January 17, 2022. NYSE: ZME investors should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 - 1554.
China based Zhangmen Education, Inc. is an online education company that engages in the provision of personalized online courses to K-12 students. On or about June 8, 2021, Zhangmen Education Inc. conducted its IPO, offering 3,623,000 ADSs (excluding the underwriters' option to purchase an additional 543,450 ADSs) at a price of $11.50 per ADS. Thereafter, Zhangmen sold 4,166,450 ADSs in the IPO (including the full exercise of the underwriters' over-allotment option) raising proceeds of approximately $47,900,000.
On July 23, 2021, China unveiled a sweeping overhaul of its education sector, banning companies that teach school curriculum from making profits, raising capital or going public. These drastic measures effectively ended any potential growth in the for-profit tutoring sector in China. For example, a Reuters report titled "China bars for-profit tutoring in core school subjects" stated that the "move threatens to decimate China's $120 billion private tutoring industry and triggered a heavy selloff in shares of tutoring firms traded in Hong Kong and New York."
On July 26, 2021, Zhangmen Education Inc. provided an update on the new PRC policies and provided a further update on August 25, 2021 on similar policies implemented by the Shanghai government and the implications for the Company's business.
From then on, on August 25, 2021, Zha Zhangmen Education Inc. provided an additional update on similar policies implemented by the Carry off government and the business implications of Zhangmen Education, stating, for example, that: (a) "No new provider of after-school tutoring services on academic subjects in From China Mandatory Education System ('Academic AST') will be approved, while existing Academic AST providers will be subject to review and re-registration as non-profit organizations "; (b)" Tuition fees for Academic AST shall follow the guidelines to avoid any overcharging or excessive profit activities "; and (c)" AST advertising will be subject to enhanced oversight. "
On November 19, 2021, Zhangmen Education Inc. announced that its auditor, Deloitte Touche Tohmatsu Certified Public Accountants LLP, had voluntarily resigned.
Shares of Zhangmen Education Inc. (NYSE: ZME) declined to as low as $1.10 per share on December 3, 2021.
The plaintiff claims that the IPO Registration Statement did not disclose that: the authorities of the People's Republic of China were in the process of implementing radical new regulatory reforms in the private education industry in porcelain including, among others, prohibitions on: (i) obtaining profits by private educational companies, (ii) participating in tutorials of the basic curriculum on weekends and holidays, and (iii) raising capital by companies like Zhangmen Education; (b) it was reasonably likely that the known risks, events and uncertainties noted in the Registration Statement would have a material adverse effect on the business of Zhangmen Education; and (c) based on the foregoing, the statements in the Registration Statement regarding historical financial performance, market demand and industry trends of Zhangmen Education were materially incomplete, inaccurate and misleading.
Those who purchased shares of Zhangmen Education Inc. (NYSE: ZME) have certain options and should contact the Shareholders Foundation.
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The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.
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