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TAL Education Plummets as China Mulls Turning Tutoring Firms Into Non-Profits

Officials are reportedly considering asking all Chinese tutoring companies to become non-profits.
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U.S.-listed shares of TAL Education  (TAL) - Get TAL Education Group Sponsored ADR Class A Report dropped sharply Friday as Chinese authorities are considering asking all companies that offer tutoring to go non-profit.

The Chinese K-12 tutoring company responded to the reports saying that it has not received any official notification from the People's Republic of China and that the new reported regulations haven'tbeen published. 

Still, TAL  dropped 50% Monday as investors expect the PRC to continue the increased pressure it has placed on publicly traded stocks over the past few months. 

Fellow Beijing-based public tutoring company New Oriental Education & Technology Group  (EDU) - Get New Oriental Education & Technology Group, Inc. Sponsored ADR Report also dropped more than 60% on the news.

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New Oriental put out an almost identical statement saying that regulations have not been published and that it has not received any correspondence about potential new regulations. 

Earlier this month, popular ride-sharing company Didi Global  (DIDI) - Get DiDi Global Inc. Report shares dropped after the Chinese government shutdown 25 of its apps. 

Since then, TheStreet's Jim Cramer has cautioned investors to stay away from Didi and other Chinese stocks due to the potential interference from the country's communist government. 

The country launched a cybersecurity review into firms newly listed in the U.S., saying it was looking to prevent data security risks and protect national security.