- A bombshell report on Friday that Beijing was considering turning tutoring firms into non-profit organizations sent shockwaves not only to the industry but across the entire Chinese private sector.
- The indiscriminate selling ensnared NetEase's Youdao which also sells hardware-based learning products as well as interactive learning apps and online courses for adults, besides K12 offerings.
- Since the motivation for the tutoring industry crackdown was to lower the cost of child-rearing, it wasn't a coincidence that property-related counters like BEKE suffered a big drop as well.
- With several Tencent investee companies under regulatory scrutiny and unfavorable developments at the holding company, Mainland Chinese sold-off the stock in droves.
- Staying away from the 'limelight' was a blessing in disguise for Alibaba which was also basking in positive developments on Ant Group IPO and the digital yuan project.
For further details see:
Chinese Internet Stocks: Resistance Is Futile