Damning Report On RYB Education Impacting Other Education Stocks

U.S.-listed Chinese education stocks are getting hammered on Friday after the South China Morning Post reported that RYB Education Inc – ADR RYB is under investigation for alleged child abuse. Shares of RYB crashed nearly 40 percent in early Friday trading, but U.S. investors were dumping other Chinese education stocks as well out of fears there may be widespread fallout from the allegations.

The initial report by Xinhua was covered by South China Morning Post on Thursday, and the accusations are sickening. According to Xinhua, RYB has suspended multiple teachers at RYB Education New World after kindergarten students claimed that they had been given unidentified pills and brown syrup, been forced to undress and locked in a dark room. 

Parents reported that at least eight children have been abused at the school and that the children are giving similar accounts of what occurred. 

“Different parents have asked their kids if it happened — all of them said yes,” one father said in an interview. “When we asked which three children, all of our kids gave the same three names.”

Beijing police are investigating the accusations, and the Chaoyang District education commission has assigned a special task force to handle the situation. A spokesperson for RYB Education told the state-run People’s Daily there is no evidence to support the parents’ allegations and the police investigation is still ongoing.

Investors were dumping RYB stock on Friday, which just held its U.S. IPO in September. Here’s a look at how other Chinese education stocks were trading:

  • New Oriental Education & Tech Grp (ADR) EDU was down 2.7 percent.
  • Bright Scholar Education Holdngs Ltd-ADR BEDU was down 3.8 percent.
  • Hailiang Education Group Inc (ADR) HLG was down 2.5 percent.

Related Links:

For-Profit Education Stocks Could Be Back In Play As Trump May Scrap Obama-Era Rules

Bitcoin Has A China Problem

Posted In: NewsLegal

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.