World News – AU – G8 Education (ASX: GEM) stock price bounces on the news of litigation


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Motley Fool Australia »Stock Market News» G8 Education (ASX: GEM) share price bounces on litigation news

Sebastian Bowen | 23. November 2020 13:28 | More about: GEM SGH ASX 200

G8 Education Ltd (ASX: GEM) is having a tough time today. G8 shares trade at $ 1. 26 at the time of writing, a 1. 21% more than on Friday. This is comparable to the broader S&P / ASX 200 index (ASX: XJO), which is up 0. 5% so far today.

It was a volatile day for G8 stocks. They opened at $ 1. 25 this morning but down nearly 12% soon after, down to $ 1. 10 just before 11 a.m.. But as fast as they fell, G8 stocks rallied spectacularly, rising slightly higher than openly for the $ 1. We are currently seeing 26 levels. What’s going on here?

We can probably trace these dramatic moves back to some news released this morning about this education company. According to today’s coverage in the Sydney Morning Herald (SMH), the law firm Slater & Gordon Limited (ASX: SGH) has filed a class action against shareholders in the Victoria Supreme Court. This class action lawsuit reportedly revolves around the G8’s continued disclosure requirements in 2017 and early 2018. According to the report, G8 released a profit downgrade during that time that saw the company’s stock price crater jump 23% in December 2017.

The SMH reports that Slater & Gordon claims the company had 2017 earnings of « medium to high $ 170 million. USD ”forecast in May 2017. However, in early December it was downgraded to « around $ 160 million » and in February it was found to be $ 156 million. The class action lawsuit appears to claim that the G8 did not adequately disclose this situation to the markets as it should have been.

We claim that the G8 has violated its continuous disclosure requirements by not disclosing to the market any information relevant to full year 2017 financial performance. We also claim that the G8 engaged in misleading or misleading behavior.

However, the G8 has fully denounced these reports. She released a statement this morning stating:

G8 Education … refers to today’s media reports that Slater and Gordon were opening a group case against the G8 in the Victoria Supreme Court for violating the G8’s continuous disclosure requirements between Jan.. May 2017 and the 23. February 2018. G8 did not receive any correspondence or service of the case from Slater and Gordon. Such proceedings, when served, are vigorously defended.

Judging by the performance of G8 stocks this morning, it seems like investors were startled by the news of class action lawsuits, only to allay their concerns with the release of the G8 – hence the « sharp V » we saw in the G8 share price today.

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Sebastian Bowen, a contributor to the Motley Fool, has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We fools may not all agree, but we all believe that taking different insights into account makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). . Authorized by Scott Phillips.

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Class Action, Slater and Gordon Lawyers, G8 Education, ASX: GEM, Childcare

World News – AU – G8 Education (ASX: GEM) share price rebounds after litigation news


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