China Education Alliance Refutes Accusations Lobbed By Research Firm (CEU)

Shares of China Education Alliance

CEU

plunged on Monday after some very bearish commentary from Kerrisdale Securities. The research firm said that the company is "fabricating its SEC financial statements" and that they believe "the company's revenue and profit are highly overstated in its SEC filings and that the company is mostly a hoax." Not surprisingly, CEU was completely destroyed on the back of Kerrisdale's report. The shares fell 33.56% to $2.93 before being halted in afternoon trading. After the closing bell, CEU released a statement categorically denying the allegations made against it. The text of the press release can be found below.

HARBIN, China, Nov. 29, 2010 /PRNewswire-Asia-FirstCall/ -- China Education Alliance, Inc. CEU, a China-based education resource and services company, today responded to allegations that appear in an online blog by Kerrisdale Capital.The Company categorically denies all the allegations contained in the blog and regards such baseless accusations very seriously. While the Company, as a matter of policy, does not respond to third party research reports, it is consulting with its advisors and legal counsel on the appropriate response in order to preserve investor confidence and shareholder value. Additional information will be forthcoming. The management team, including Mr. Yu, China Education Alliance, Inc. Chairman and CEO, welcomes investors and shareholders to visit their Harbin headquarters.The Company will explore all options available to it, including without limitation, aggressively pursuing legal remedies for damages caused to the Company and its shareholders.

Market News and Data brought to you by Benzinga APIs