K12, an online education company, released a statement disclosing the progress of its internal investigation.
After some of the short-selling reports against the Company were published in early 2020, the Company’s independent audit committee engaged third-party professional consultants to conduct an independent review of the allegations made in those reports. Those internal investigations are now largely complete and have found no evidence that could have had a material impact on whom to follow in previously released financial reports.
The company said it would continue to cooperate with the Securities and Exchange Commission in its investigation. The Company cannot predict the duration, outcome or impact of the SEC investigation.
It rose 2.04 percent to $104.95 on March 1 and surged 6.73 percent in after-hours trading.
The company was founded in June 2014 under the leadership of Chen Xiangdong, former CEO of New Orient-S (09901). On March 30, 2015, the company announced its A round of financing of 50 million US dollars. In June, 2019, the company was listed on the New York Stock Exchange. At present, Who-Learn has brands such as Follow Who-Learn, GaoTu Class, Trail Business School, Jin Park School, Weishi, BabyABC and so on.
Grizzly Research, Citron Research and Muddy Waters, among others, took 15 short positions in 2020, accused of massively inflating revenues and profits. At the time, many online education companies under losses, and who learn with results show that the company has a profit, and revenue and profit increase in more than three digits, earnings growth is “good to the incredible”, good future and gross profit margin is much higher education and other big-name players, who make learning become a short-seller take turns with the object of the sniper.
Because of the continuous short, with whom to learn by the United States Securities and Exchange Commission. Prior to the SEC’s inquiry, the company’s audit committee had hired third-party professional advisers to conduct an independent internal investigation into allegations made in multiple short-selling reports, the company said at the time of its third-quarter 2020 results. After the conclusion of the investigation, the professional consultant will present the findings and conclusions to the audit committee and the company. The company continues to cooperate with the SEC and cannot predict the timing or outcome of the SEC investigation.
However, it is worth mentioning that with the increasingly fierce competition on the online education track, the performance of many short sellers “marveled” also turned into losses in the third quarter of 2020. In the third quarter of 2020, its operating revenue was 1.966 billion yuan, an increase of 252.9% year on year, resulting in a net loss of 930 billion yuan, compared with a profit of 1.9 million yuan in the same period last year. In the quarter, sales expenses from Who to Learn reached 2.056 billion yuan, up 522 percent year on year.
So far this year, the stock has risen from $51.71 to $104.95, a range gain of 102.96%.