New Oriental Education and Technology Group Inc. (EDU) Stock Continues to Tumble After Education Company Provides New Regulations Update

What’s Going on with New Oriental Education & Technology Group Inc.? New Oriental Education & Technology Group Inc. ( EDU ) — the biggest provider of private educational services in China — published an update on new regulations recently put forth by the Chinese government related to after-school tutoring and private educational services. Last Friday, July 23, EDU stock tumbled 54.22%, closing at $2.93 a share. This morning, pre-market, EDU stock was trading at $2.21 a share, which is a further 24.57% decline. What Does This Mean for EDU? Similar to other companies in China’s private education and tutoring industry (like Gaotu Techedu Inc.), New Oriental Education & Technology Group Inc. is in the midst of a huge shake-up. One of the Chinese government’s official reasons for this overhaul is to ease the financial burdens parents face raising children in China. The General Office of the Communist Party of China Central Committee, along with the General Office of the State Council, has mandated that institutions offering tuition covering school curriculum must now be registered as non-profit organizations. Furthermore, registered Academic AST (After-School Tutoring) Institutions will have to adhere to government approval-based curriculum regimes, refrain from using foreign capital investments and ban foreign ownership. In its update, New Oriental Education & Technology Group Inc. stated, “The Company [EDU] will follow the spirit of the Opinion [new governmental private education regulations] and comply with relevant rules and regulations when providing educational services. The Company is considering appropriate compliance measures to be taken, and expects such measures to have material adverse impact on its after-school tutoring services related to academic subjects in China's compulsory education system.” New Oriental Education & Tech Grp has a Bearish sentiment reading. Find out what this means for you and get the rest of the rankings on EDU! See Full EDU Stock Report