New rules to regulate Chinese educational technology companies continue to cast a shadow over global stock markets.
Overnight, some of China’s billionaires lost most of their fortunes after the market value of Chinese education companies, whether listed in China or on Wall Street, collapsed.
New regulations ban Chinese educational technology companies from earning money Profits or obtaining foreign investments Or go public, which would wipe out billions of dollars from the education technology sector.
Larry Chen, the former teacher who founded the online educational platform Gaotu Techedu in 2014, cost nearly $15 billion after the company’s shares fell by nearly two-thirds in New York trading on Friday. As a result, his fortune fell to 336 million dollars.
In turn, Zhang Bangxin, CEO of TAL Education Group, lost about $2.5 billion, to reach his fortune at $1.4 billion, after the company’s shares fell by 71%.
The fortune of Yu Minhong, Chairman of the Board of Directors of New Oriental Education & Technology Group, also declined by 685 million dollars after the company’s shares fell by 54%.
China recently issued new regulations banning school-curriculum companies from making profits, acquiring foreign investments or going public, and also preventing investors in the sector such as Temasek Holdings and Tiger Global Management from exiting.
The $100 billion private and online education sector is the third after e-commerce and health to face tough regulation in China.