Gridsum Holding Inc. (GSUM) Accused of Misleading Investors About Its Financial Condition
According to a recently filed complaint, Defendants made materially false and misleading statements regarding Gridsum’s business, operational, and compliance policies. Despite touting positive financial results and customer base expansion, on April 23, 2018, the company announced that its audit report for the company’s financial statements for the year ended December 31, 2016, should not be relied on. Gridsum admitted that its auditor found issues related to revenue recognition, cash flow, cost, expense items, and their underlying documentation, and acknowledged that the company was conducting an internal audit to investigate the issue. On this news, Gridsum’s ADR price fell over 16% to close at $6.12 on April 23, 2018, and has yet to recover.
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