Shares of Koolearn Technology Holding, a Chinese company mainly engaged in providing online education courses, has rallied about 275% over the past four trading days.
What's behind the crazy surge
The stock surges came after video clips of$New Oriental (EDU.US)$teachers mixing successful English lessons while they livestream on Douyin, the Chinese version of TikTok, went viral successful in China's internet.
The "double reduction" policy introduced by Chinese authorities in July, 2021 to reduce the burden of students' excessive homework and off-campus tutoring has seriously plagued throughout the education industry.
In addition, the overall downward trend of Chinese concept stocks also dragged down the stock price of$EAST BUY (01797.HK)$.
The sharp rise in the past four days is not only because of the public attention that its livestreams has attracted, but also because the sharply plummeted stock price has provided considerable room for a rebound when a new business model bring chances for a company.
The recovery from the historical bottom is like a retailatory rebound.
Therefore, buying the dip should not be blind, but should be combined with the company's future potential and current valuation.
After a round of sharp falls, there should be some oversold stocks waiting to be discovered.
Disclaimer: Investing involves risk and the potential to lose principal. Past performance does not guarantee future results. This is for information and illustrative purposes only. It should not be relied on as advice or recommendation.
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