The company gave multiple conflicting responses to allegations leveled by us, and later by other short sellers. In the meantime, we procured what we deem further definitive evidence that demonstrates GSX’s false and misleading statements.
We have continued our research and analysis, and have discovered what we believe is comprehensive first-hand data that originates from GSX themselves that shows the real enrollment count of students, as opposed to calculations that derive this number. In our opinion, this amounts to definitive proof of GSX’s fraud, and shows that GSX publicly claimed student enrollment count and revenue are inflated by approximately 900%.
Our report contains technical instructions and a video guide showing how anyone can replicate our findings. We urge investors and regulators to look into this matter in immediately because GSX will likely try to cover up its tracks now that we have exposed the methodology of its fraud.
We have also reviewed detailed evidence that confirms that GSX appears to be conducting illegal marketing activities on a massive scale. We believe the company’s core marketing strategy is built around identity theft.
We obtained records from a third party vendor in China that alleges that it was paid by GSX to supply GSX with fake WeChat IDs and national IDs. We confirmed the authenticity of these documents, including wire transfers between GSX and the vendor.
Our analysis of this data suggests that GSX bought over 200,000 fake WeChat Accounts. We sampled 3,000 accounts, most of which we could identify as GSX teachers/tutors. These practices are illegal, we expect Chinese regulators to step in soon.
We cover numerous other wrongdoings in this report. We believe that GSX will not be able to credibly defend itself against the numerous allegations that we now confirmed with definitive proof. Other short sellers have started to wise up on GSX’s fraudulent behavior, and we believe the market and regulators are soon to follow.
THIS REPORT AND ALL STATEMENTS CONTAINED HEREIN ARE THE OPINIONS OF GRIZZLY RESEARCH LLC AND ARE NOT STATEMENTS OF FACT.
Reports are based on generally available information, field research, inferences and deductions through Grizzly Research LLC’s due diligence and analytical process.
Our opinions are held in good faith, and we have based them upon publicly available facts and evidence collected and analyzed including our understanding of representations made by the management of the companies we analyze, all of which we set out in our research reports to support our opinions, all of which we set out herein. HOWEVER, THEY REMAIN OUR OPINIONS AND BELIEFS ONLY.
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THIS REPORT AND ALL STATEMENTS CONTAINED HEREIN ARE THE OPINIONS OF GRIZZLY RESEARCH LLC AND ARE NOT STATEMENTS OF FACT.
Reports are based on generally available information, field research, inferences and deductions through Grizzly Research LLC’s due diligence and analytical process.
Our opinions are held in good faith, and we have based them upon publicly available facts and evidence collected and analyzed including our understanding of representations made by the management of the companies we analyze, all of which we set out in our research reports to support our opinions, all of which we set out herein. HOWEVER, THEY REMAIN OUR OPINIONS AND BELIEFS ONLY.
We conducted research and analysis based on public information in a manner that any person could have done if they had been interested in doing so. You can publicly access any piece of evidence cited in this report or that we relied on to write this report.
Grizzly Research LLC makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use.
We are entitled to our opinions and to the right to express such opinions in a public forum. We believe that the publication of our opinions and the underlying facts about the public companies we research is in the public interest, and that publication is justified due to the fact that public investors and the market are connected in a common interest in the true value and share price of the public companies we research. All expressions of opinion are subject to change without notice, Grizzly Research LLC does not undertake a duty to update or supplement this report or any of the information contained herein.
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As of the publication date of GRIZZLY RESEARCH LLC’S report, Certain GRIZZLY RESEARCH LLC Associated Persons (AS DEFINED HEREUNDER) (along with or through its members, partners, affiliates, employees, and/or consultants), clients, and investors, and/or their clients and investors have a short position in the securities of a Covered Issuer (and options, swaps, and other derivatives related to these securities), and therefore will realize significant gains in the event that the prices of a Covered Issuer’s securities decline. GRIZZLY RESEARCH LLC and GRIZZLY RESEARCH LLC Associated Persons are likely to continue to transact in Covered Issuers’ securities for an indefinite period after an initial report on a Covered Issuer, and such position(s) may be long, short, or neutral at any time hereafter regardless of their initial position(s) and views as stated in GRIZZLY RESEARCH LLC’S research. One or more GRIZZLY RESEARCH LLC associated Persons have provided GRIZZLY RESEARCH LLC with publicly available information that GRIZZLY RESEARCH LLC has included in this report, following GRIZZLY RESEARCH LLC’S independent due diligence. YOU SHOULD DO YOUR OWN RESEARCH AND DUE DILIGENCE BEFORE MAKING ANY INVESTMENT DECISION WITH RESPECT TO THE SECURITIES COVERED HEREIN. THE OPINIONS EXPRESSED IN THIS REPORT ARE NOT INVESTMENT ADVICE NOR SHOULD THEY BE CONSTRUED AS INVESTMENT ADVICE OR ANY RECOMMENDATION OF ANY KIND. FOLLOWING PUBLICATION OF THIS REPORT, WE MAY CONTINUE TRANSACTING IN THE SECURITIES COVERED THEREIN, AND WE MAY BE LONG, SHORT, OR NEUTRAL AT ANY TIME HEREAFTER REGARDLESS OF OUR INITIAL OPINION.
To the best of our ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and who are not insiders or connected persons of the stock covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer. Note that researched companies and insiders, agents, and legal representatives of researched companies and other entities mentioned herein may be in possession of material non-public information that may be relevant to the matters discussed herein. Do not presume that any person or company mentioned herein has reviewed our report prior to its publication.
This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
By downloading and opening this report you knowingly and independently agree: (i) that any dispute arising from your use of this report or viewing the material herein shall be governed by the laws of the State of [New York], without regard to any conflict of law provisions; (ii) to submit to the personal and exclusive jurisdiction of the superior courts located within the State of [New York] and waive your right to any other jurisdiction or applicable law, given that Grizzly Research LLC is a Delaware limited liability company; and (iii) that regardless of any statute or law to the contrary, any claim or cause of action arising out of or related to use of this website or the material herein must be filed within one (1) year after such claim or cause of action arose or be forever barred. The failure of Grizzly Research LLC to exercise or enforce any right or provision of this disclaimer shall not constitute a waiver of this right or provision. If any provision of this disclaimer is found by a court of competent jurisdiction to be invalid, the parties nevertheless agree that the court should endeavor to give effect to the parties’ intentions as rejected in the provision and rule that the other provisions of this disclaimer remain in full force and effect, in particular as to this governing law and jurisdiction provision. You agree that the information on this website is copyrighted, and you therefore agree not to distribute this information (whether the downloaded _le, copies / images / reproductions, or the link to these _les) in any manner other than by providing the following link: http://GRIZZLYREPORTS.COM . If you have obtained research published by Grizzly Research LLC in any manner other than by download from that link, you may not read such research without going to that link and agreeing to the Terms of Use on the Grizzly Research LLC designated website.
“Grizzly Research LLC Associated Person” is defined as: Grizzly Research LLC and its affiliates and related parties, including, but not limited to, any principals, officers, directors, employees, members, clients, investors, consultants, and agents.
