Concerns about the Chinese government’s crackdown on extracurricular tutoring have caused a severe setback in Chinese education stocks.
The shares of New Oriental Education & Technology Group (EDU) and its competitor TAL Education Group (TAL) both fell about 58% in the previous market on Friday. Earlier in the day, New Oriental’s Hong Kong-listed shares fell 41%.
The Wall Street Journal saw an unverified document circulating among investors. The document, which appears to be an official communication, detailed new and stricter guidelines for the industry.
New Oriental and Good Future issued separate statements on Friday stating that the government has not issued any regulations and neither company has received an official notification. They said they would not comment on market rumors.
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