Several value investors have agreed to purchase newly issued shares of the US-listed EdTech firm.
According to Chinese media channel DoNews, people close to GSX said that this financing is to increase the company's cash reserves and increase the full range of investment in its K12 business brand, Gaotu Classroom, including investment in technological and content R&D. At the same time, the company will also increase the market investment in a high return on investment.
In addition, GSX the only profit-making education company from China to report a loss for the first time since being listed. The amount of losses in a single quarter far exceeds all the accumulated profit income that the firm has reported in the past.
The financial report shows that, in the third quarter of 2020, GSX had a net loss of CNY 932.5 million, compared with a net profit of CNY 1.9 million in the same period last year, a year-on-year decrease of 49153.63%.