Red Tsunami comes for the Chinese educational platforms

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Shares of Chinese companies active in digital education are in danger of collapsing when the American Stock Exchange opens this afternoon.

The Chinese government is considering obliging the educational technology sector to adopt a non-profit model, according to several Chinese media. According to the media, Beijing would consider introducing new legislation for this.

This would result in these companies, the stock market and the fresh capital to get going, according to news agency Bloomberg, not least because foreign capital, according to a source, are excluded and will be.

The exchange losses on Friday afternoon in the front door trade are enormous. For example, a company like Tal Education loses almost 60 percent in the front door business and New Oriental Education & Technology as much as 65 percent. Both shares are listed on the American NYSE.

Gaotu Techedu also seems to lose more than 60 percent of market capitalisation.

The rumors that are now causing these huge price drops have not yet been confirmed by the Chinese government.

About the author

Lesley Woutersen

Lesley Woutersen, one of the co-founders of the EconomicInform gives away all of his free time to the project. He is interested in stock exchange and digital assets. Lesley can be reached by [email protected]

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