Education of Zhangmen (NYSE: ZME) is the latest stock to be delisted by NYSE regulators, raising concerns about China-based companies on US exchanges.
Zhangmen’s disbarment is due to his inability to maintain a market capitalization of at least $15 million for the 30 days. The stock had fallen more than 99% from its 2021 highs as the Chinese government’s crackdown on the industry wiped out the ability of online tutors to operate in the region.
This fate could also hit many Chinese online education stocks which have seen their market capitalization fall by similar margins. While heavyweights like Tal Education (TAL) and New Oriental Education & Technology Group (EDU) still have market caps north of $1 billion, smaller NYSE-listed players like Rise Education Cayman (REDU), 17 Education & Technology (YQ), Bright Scholar Education Holdings (BEDU) and Sunlands Technology Group (STG) could be just one adverse policy change to fall to similar levels.
Not to mention the debarment fears that stem from SEC regulations outside of the specific Holding Foreign Companies Accountable Act (HFCAA). Rise Education and 17 Education have been identified for delisting in the latest HFCAA update.
Other Chinese values of education: Gaotu Techedu (GOTU +8.7%), iHuman (IH +4.4%), Tarena International (TEDU +2.2%) and Hailang Education Group (HLG).
Learn more about the latent concerns about Chinese ADRs in general.