Chinese online education platform GSX Techedu (GSX) slipped after short seller Citron Research published a report labeling it “the most blatant Chinese stock fraud since 2011.” Citron claimed that up to 70% of GSX’s revenues are fictitious.
According to The Paper, Chen Xiangdong, founder and CEO of GSX, responded on his WeChat moments, claiming: “We are out of words for how shameless this report is.” Chen also quoted a Chinese idiom to argue the value of honesty: “As we often say, ‘a miss is as good as a mile.’ This is how certain people, personalities, reputation, wealth, and organizations stand out from the rest. Because of trust and belief. It’s that simple.”
GSX was founded in June 2014 by former New Oriental Executive Chen Xiangdong. On March 30, 2015, the company announced its A round of financing of $50 million. In June 2019, GSX listed on the NYSE.