Zhangmen Education Inc. (ZME) Made False and Misleading Statements in its Offering Materials Supporting its IPO
A class action was filed on behalf of all persons and entities that purchased Zhangmen Education Inc. (NYSE: ZME) American Depository Shares (“ADSs”) pursuant to the Company’s June 2021 initial public offering (“IPO”). The complaint alleges violations of the Securities Act of 1933. Zhangmen is an education company focused on providing personalized online courses to K-12 students in China.
According to the complaint, Zhangmen filed its Prospectus, which forms part of the Registration Statement for the IPO, with the Securities & Exchange Commission, offering 3.623 million ADSs at $11.50 per ADS. However, defendants failed to disclose that prior to the IPO, China had adopted stringent new regulations aimed at curbing fraud in China’s online education market. This sweeping crackdown on the Chinese tutoring industry would effectively ban profit-making in the sector, essentially destroying Zhangmen’s business and prospects.
On July 23, 2021, China unveiled its overhaul of the education sector, banning companies that teach school curriculum from making profits, raising capital, or going public. Zhangmen’s ADSs now trade at less than $1.50 per ADS.
If you purchased Zhangmen Education Inc. (ZME) ADSs pursuant to the Company’s June 2021 IPO, you have until January 18, 2022, to ask the court to appoint you lead plaintiff for the class. Submit a form for more information.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.