Fortunes of GSX Techedu Inc.’s owner Larry Chen fell by 81% in the stock market tumbling in late January, according to Bloomberg. Chen’s fortunes have plunged almost $13 billion to $3 billion since its January peak following the investor’s exposure to the collapsed Archegos Capital Management.
GSX experienced wider-than-expected losses, with Grizzly Research saying that auditor Deloitte should not give an opinion on the firm’s annual report.
Grizzly has also questioned the number and qualifications of teachers on Chen’s online tutoring firm GSX.
Chen has downplayed criticism from teachers on the tutoring platform claiming the bar is “very high” to become an instructor.
Some analysts are confident GSX’s stock will recover as it has captured a significant market in China while Covid-19 crisis has heightened demand for online education.
JPMorgan Chase & Co. lifted GSX’s stock’s rating, expecting the selling pressure to subsideGSX stock is currently gaining. GSX: NYSE is up 0.70% on premarket.
