GOTU - Why NetEase Huya and Gaotu Techedu Stocks All Dropped Today
2023-12-22 13:09:23 ET
As the trading week winds down on Friday and heads into the holidays, there's big trouble brewing in China's big tech sector. Shares of online gaming company NetEase (NASDAQ: NTES) crashed 15% through noon today, while Huya (NYSE: HUYA) , a specialist in livestreaming of online games, fell 10.7% in response to rumored regulations coming down from the Chinese government.
Gaotu Techedu (NYSE: GOTU) , which isn't a gaming company at all but rather a for-profit educator, seemed to fall in sympathy with its gaming peers, down 8.1% as it had flashbacks from its own 2021 regulatory-induced stock market crash.
In early to mid 2021, Chinese regulators issued a flurry of new regulations aimed at reining in the country's red hot for-profit education sector, based on worries that families were spending too much on an educational arms race to get their kids into the best schools. The government restricted the sale of online educational services to young children, regulated advertising of educational services, restricted the hours when tutoring could take place, and even regulated the prices companies could charge.
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Why NetEase, Huya, and Gaotu Techedu Stocks All Dropped Today