Kindergarten company hit by lawsuits and short sellers - SupChina

Kindergarten company hit by lawsuits and short sellers

Part of the daily SupChina newsletter. 0

RYB Education, the company at the center of a child abuse scandal, runs about 1,800 kindergartens and education centers around China.

  • Caixin reports (paywall) that this week “at least six law firms filed or threatened class action lawsuits against the company” over the abuse allegations.
  • RYB listed on the New York Stock Exchange in September this year. Its shares rose steadily until news of the abuses at the Beijing kindergarten spread. Caixin says that RYB shares are now trading at “more than 20% below levels from shortly before the scandal broke.”
  • The South China Morning Post says that as early as October, short sellers had already positioned themselves for a slump in the company’s value, possibly because of “the company’s 200-plus-page prospectus document, in which it strangely devoted 37 pages to the risks facing its business.”

Jeremy Goldkorn

Jeremy Goldkorn is co-founder of the Sinica Podcast and currently edits SupChina and its daily newsletter.