Gaotu Techedu saw its U.S-listed shares pop some 20% Monday amid a rebound for Chinese stocks, but the struggling Chinese online-learning firm’s stock is still down more than 97% from its August 2020 peak.
GOTU rose as much as 30.4% to $4.38 during Monday’s session before pulling back some to close at $4.01, up 19.3% on the session.
Shares apparently rose on a rebound in Chinese stocks in both Hong Kong and the United States on news that Beijing had fined Chinese food-delivery giant Meituan 3.44 billion yuan ($534.3 million) for allegedly abusing its leading market position. Markets seemed to interpret the news as a sign that Beijing’s recent crackdown on Chinese tech firms could be drawing to a close.
Gaotu Techedu, which offers online K-12 tutoring to Chinese kids, has especially suffered from the crackdown.
The stock has sunk along with that of rivals New Oriental Education & Technology Group and TAL Education on word that the Chinese government plans to ban for-profit students tutoring firms. GOTU has said it plans to refocus on online professional and tech education for adults instead.
But even with Monday’s gains, GOTU’s New York Stock Exchange-listed shares have still lost 97.2% of their value since peaking at $141.78 in August 2020. Shares even fell to as low as $2.25 intraday this past August, down 98.4% peak to trough.
Author: Jerry Kronenberg, Seeking Alpha