EDU Plummets on Potential Non-Profit Law

In response, J.P. Morgan Securities downgraded the stock

Deputy Editor
Jul 23, 2021 at 10:17 AM
facebook X logo linkedin


The shares of New Oriental Education & Technology Group Inc (NYSE:EDU) are taking a nosedive into penny stock territory, after news broke that China is considering making companies that offer tutoring services on school curriculum go non-profit, affecting a vast industry. EDU is down 65.6% at $2.20, firmly into the short sell restricted list and a far cry from its Feb. 16  record peak of $19.97. 

EDU has plunged on the charts since the start of May, guided lower by the descending 20-day moving average. Today's steep drop, however, has the equity at its lowest level in roughly six years. Coincidentally, the equity was down 65.6% year-to-date heading into Friday -- the same deficit it's already experiencing in today's session. 

In response, J.P. Morgan Securities downgraded the stock to "underweight" from "overweight," with a large price-target cut to $3.50 from $19. There is plenty of room for further bear notes, as coming into today, four of the five analysts in coverage carried a "strong buy" rating on EDU. Plus, the 12-month consensus price target of $15.84 is a drastic premium to current levels. 

The options pits have been similarly bullish. EDU's 50-day call/put volume ratio of 3.50 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all but 1% of readings from this past year. This means long calls have been picked up at a much faster-than-usual rate in the last 10 weeks. 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI