Not too long ago the Rise Education Cayman Ltd (NASDAQ:REDU) stock had gone through a bit of a slump. However, on Monday, the stock seemed to have commenced a path to recovery and ended the day with gains of 6%.
There was no news about the company that might have resulted in this recovery but at the same time it could be a good move to take a look at a significant development from July. The Chinese company is involved in the education services sector and is regarded as one of the leading operators.
However, in recent times, the Chinese state has come up with some pretty strict directives with regards to the scope of the education services sector. As per the opinions expressed by the General Office of the CPC Central Committee and the General Office of the State Council, a range of new requirements as well as restrictions have been brought in to the education services sector.
The directives are going to apply for both offline and online tutoring services provided by companies like Rise Education Cayman. Hence, it was no surprise that the stock suffered from a slump amidst heightened uncertainty. It now remains to be seen if the recovery in the stock continued today or not.