Sunlands Technology Group (STG) Accused of Misleading Investors in IPO

According to the complaint against the company for alleged violations of the Securities Act of 1933 pursuant to its March 2018 initial public offering ("IPO"), Sunlands Technology Group (STG) held its IPO on March 23, 2018, offering 13,000,000 American Depository Shares ("ADSs") at $11.50 per share. In its Registration Statement, Sunlands touted its rapid growth in net revenue and gross billings, which it attributed to its fast-growing student enrollment as a result of its transition to online courses. However, this statement proved to be materially false and misleading as Sunlands' financial results from its filed May 2019 Form 6-K revealed a 34% decrease in new student enrollment and a 28.6% decrease year-over-year in gross billings. Since Sunlands' IPO, the ADSs have plummeted almost 80% from the IPO price, and currently trade at about $2.40 a share.