Key points:
- The OneSmart Edu stock soared 34.2% despite receiving a non-compliance notice from the NYSE.
- The tutoring company is one of the few such companies still operating in China.
- Its shares are trading at multi-month lows, having fallen 94.7% in the past year.
The OneSmart International Edun Gr Ltd – ADR (NYSE: ONE) stock price soared 34.2% during premarket trading despite receiving a non-compliance notice from the New York Stock Exchange after failing to file its annual results.
The exam preparation and tutoring company is one of the few educational companies operating in China following the government crackdown on tutoring companies.
It appears that retail investors are pretty interested in the company and are willing to buy its shares despite the non-compliance notice from the NYSE.
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OneSmart International Education had notified the NYSE that it had failed to file its annual return due to the sudden change in its accounting firm via the 6-K report filed on January 5, 2022.
The NYSE could grant the education firm a six-month extension to the filing deadline, which lapsed on December 31, 2021. However, the company is yet to file an official request to extend the filing deadline with the NYSE.
Today’s rally is a good sign for the Chinese education company as the industry remains in a state of flux after many companies shuttered their operations due to the strict regulations imposed by the Chinese government.
It appears investors are keen to invest in Chinese companies despite the looming threat of delisting from the NYSE as Sino-US relations remain frothy.
Many investors are expecting some of the leading Chinese tech companies to delist from US exchanges due to immense pressure from the Chinese government to relocate their operations back home and list on the Hong Kong or Shangai exchanges.
Meanwhile, I think today’s move is a step in the right direction, but I would not back a company on the verge of delisting from the NYSE. It’s just not a prudent move regardless of the gains I would potentially miss.
However, traders interested in timing the stock’s bottom after a decline may find the shares attractive, but the risk of a further fall has not diminished.