The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Zhangmen Education Inc. (ZME)
The Law Offices of Frank R. Cruz reminds investors of the upcoming January 18, 2022 deadline to file a lead plaintiff motion in the case filed on behalf of investors who purchased Zhangmen Education Inc. ("Zhangmen" or the "Company") (NYSE: ZME) American Depositary Shares ("ADSs or shares") pursuant and/or traceable to the registration statement and prospectus (collectively, the "Registration Statement") issued in connection with the Company's June 2021 initial public offering ("IPO").
If you are a shareholder who suffered a loss, click here to participate.
In June 2021, Zhangmen, an education company focused on providing personalized online courses to K-12 students in China, conducted its IPO, selling 4,166,450 ADSs at a price of $11.50 per ADS.
Then, on July 23, 2021, China revealed an extensive overhaul of its education sector, prohibiting companies that teach the school curriculum from makig profits, raising capital or going public. This effectively ended China's $120 billion private tutoring industry.
On July 26, 2021, Zhangmen issued a release stating that these new guidelines were likely "to have material impacts on our existing business operations, financial condition and corporate structure."
Then, on November 19, 2021, Zhangmen announced that its independent auditor had resigned.
On November 19, 2021, the Company's share price closed at $1.47 per ADS, an 80% decline from the IPO price.
The complaint filed in this class action alleges that the Registration Statement failed to disclose that: (a) the People's Republic of China ("PRC") authorities were in the process of implementing sweeping new regulatory reforms on the private education industry in China including, among others, prohibitions on: (i) profit-making by private education companies, (ii) engaging in core-curriculum tutoring on weekends and vacations, and (iii) capital-raising by companies like Zhangmen; (b) the known risks, events, and uncertainties noted in the Registration Statement were reasonably likely to have a material adverse effect on Zhangmen's business; and (c) based on the foregoing, the statements in the Registration Statement concerning Zhangmen's historical financial performance, market demand, and industry trends were materially incomplete, inaccurate, and misleading.
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If you purchased or otherwise acquired Zhangmen ADSs pursuant and/or traceable to the IPO, you may move the Court no later than January 18, 2022 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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