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      Why is TAL Education Group (TAL) stock rising in pre-market today? - Stocks Telegraph

      By Muhammad Ali

      Published on

      July 27, 2021

      11:17 AM UTC

      Why is TAL Education Group (TAL) stock rising in pre-market today? - Stocks Telegraph

      Shares of the TAL Education Group (TAL) stock were rising in the pre-market trading session today on July 27, 2021, after seeing a major drop yesterday due to the widening of the official crackdown by the Chinese government against for-profit education companies. TAL stock price saw a push of 9.09% to reach $4.80 a share as of this writing. The stock dropped by 26.67% at the previous closing. Let’s discuss more of it.

      What’s Happening?

      TAL Education Group offers K-12 after-school tutoring services to students in the People’s Republic of China. There is no specific news related to TAL stock in today’s date to support today’s bullish sentiment. On the other hand, the Chinese government yesterday announced an extended overhaul for its education sector in order to decrease the education expenses for Chinese families.

      New Rules:

      According to the new rules of Chinese regulators, the Chinese tutoring stock will have to become a non-profit for their survival. They would have no right to generate capital in the stock market and would not be able to invest in any other education-providing entity. Moreover no, new licenses would be granted as mentioned in the official document.

      TAL stock Reaction on new Rules:

      TAL Education will comply with all the rules and regulations that Chinese regulators are imposing on the education sector. However, the management of TAL stock said that the new rules will adversely affect its after-school tutoring services. This would ultimately significantly impact TAL stock’s operations and prospects.

      Analyst View on TAL stock:

      The Goldman Sachs analyst Christine Chao in response to these rules downgraded TAL stock from buy to neutral. Bank of America analyst Lucy Yu downgraded from buy to underperform after the new rules surfaced.

      Conclusion:

      After facing a major drop in the previous trading following the announcement of new rules for the Chinese for-profit education sector, TAL Education stock is climbing again in today’s pre-market. However, things don’t seem to be favorable for Chinese education stocks. The management is looking for possible ways to comply with new rules and regulations. In a nutshell, investors need to be cautious before adding this stock to their portfolio. 

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