Over the course of the past month the Chinese tutoring industry suffered considerable due to the new directives brought in but the Chinese government and 17 Education & Technology Group Inc (NASDAQ:YQ) was no exception.
However, on Monday, the stock managed to make a bit of a recovery and went up by 10%. That being said, it should not be forgotten that in the previous month up until Monday, the 17 Education & Technology stock had slumped by as much as 60%. Last month the stock had slumped after it emerged that the Chinese government was looking into the possibility of turning tutoring companies into not for profit entities.
It goes without saying that such a development came as a major blow to most investors and soon enough the 17 Education & Technology stock suffered a selloff like most of the other companies in the sector.
In addition to that, such a designation is also going to effectively bar tutoring companies from listing on stock markets or raising capital. On the other hand, it would also make it illegal for those companies to seek investments from foreign entities. Hence, the slump in the 17 Education & Technology in recent weeks was perhaps not a surprise.