ONE Stock: 8 Things to Know as Investors Hit the Books With OneSmart

It doesn’t seem like Chinese regulators are going to let up on stocks listed on overseas exchanges any time soon. However, that’s not stopping some Chinese plays from going on tears on the U.S. market. Today, OneSmart International Education Group (NYSE:ONE) is one of those plays. But with Chinese education stocks in peril, what’s elevating ONE stock?

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There are a number of factors driving the price of ONE stock up today, from investors trying to trigger a squeeze to increased buyer interest from a competitor going private. With that said, here’s what you need to know about the company’s goings-on.

ONE Stock Gets a Boost From Mass Buying, Competitor Merger

  • OneSmart is a Chinese education play, which isn’t a sector that’s doing too well right now. The Chinese government is planning on turning these companies into non-profits in the quest for more highly educated citizens.
  • However, that’s not holding back investors from buying. The stock is seeing over 185 million shares trade hands today, well beyond its daily average of just 523,000.
  • As such, the stock shot up a whopping 73%.
  • Why are investors so interested? Well, the primary reason is because the New York Stock Exchange has sent OneSmart a letter of non-compliance; the stock is facing potential delisting.
  • The non-compliance letter comes because ONE stock has traded for 30 consecutive days for under $1. By NYSE rules, this is reason for delisting. The company has six months to correct this.
  • Why might this be a good thing for investors? Well, the company won’t be issuing new stock because dilution would simply worsen their problem. And with the Chinese education industry already in distress, short-stock savants are drooling at the play.
  • Much of the massive buying today likely comes from the idea that institutions are planning on shorting the stock, and as has been proven time and again, retail traders won’t stand for that.
  • Additionally, OneSmart’s competitor, Tarena International, just exited the U.S. market. The company merged with a Chinese holding company to take itself private, likely to appease the Chinese Communist Party (CCP). As such, ONE is getting attention for weathering the storm.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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