According to the lawsuit, the IPO’s Registration Statement made false and/or misleading statements and/or failed to disclose that:
- Chinese authorities were in the process of implementing sweeping new regulatory reforms on the private education industry in China including, among others, prohibitions on:
- profit-making by private education companies,
- engaging in core-curriculum tutoring on weekends and vacations, and
- capital-raising by companies like Zhangmen Education;
- the known risks, events, and uncertainties noted in the Registration Statement were reasonably likely to have a material adverse effect on Zhangmen Education’s business; and
- based on the foregoing, the statements in the Registration Statement concerning Zhangmen Education’s historical financial performance, market demand, and industry trends were materially incomplete, inaccurate, and misleading.
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