Gaotu Techedu Inc. (GOTU) stock price has increased to 1.61% in the premarket. However, the last trading session closed at $2.48 with a decrease of 5.7%.
GOTU Provides Update on Regulatory Development
GOTU declared on 19th August 2021 that the Beijing Municipal Committee and the Beijing Municipality Government mutually gave the Beijing Municipality’s Measures. These measures will Reduce the Burden of Homework and After-School Tutoring on Students in Compulsory Education in Beijing. They also distributed the full text of the Beijing Measures on August 18, 2021.
The Beijing Measures will carry out the Opinions on Further Alleviating the Burden of Homework. They guaranteed that the exorbitant weight upon understudies from school schoolwork will adequately decrease before the finish of 2021.
GOTU announces management change
Mr. Wei Liu, Vice President, has resigned for personal reasons, according to the announcement on 17th August 2021. On the same day, the resignation becomes effective.
GOTU’s founder, Mr. Larry Xiangdong Chen, said that he would like to offer his profound thanks to Wei on behalf of Gaotu for his commitment and tremendous contribution to the company over the years.
New Regulation Updates
The General Office of the CPC Central Committee and the General Office of the State Council jointly announced the Opinions on Further Alleviating the Burden of Homework.
Moreover, in providing educational services, GOTU will continue to follow all applicable rules and regulations, including those that will be adopted in response to the Opinion’s policy directives.
Also, GOTU anticipates that the Opinion, related rules, and regulations. And the Company’s compliance measures will have a material negative impact on its after-school tutoring services related to academic subjects. This will negatively impact the Company’s operating results and prospects.
Lastly, in order to comply with the Opinion and any related rules and regulations, the Company will proactively seek guidance from government authorities and cooperate with them.
Media Reports by GOTU
GOTU updated some media reports on 23rd July 2021. The PRC regulators are considering a new set of regulations concerning after-school tutoring services related to school subjects taught in China. Last but not the least, the regulations have yet to be published. And the Company has yet to receive official notification of them. GOTU has a policy of not commenting on market rumors.