New Oriental Education & Tech Grp (EDU) announced $50 million stock repurchase program, EDU shares opened higher Friday and kept the uptrend, and finally closed up 15.27%, to $12.91.
New Oriental saw its share price plunging 35% for two consecutive trading days because it was investigated on the VIE structural adjustment and questioned by muddy water; its shares declined from the closing price of $22.26 on July 16 to Wednesday’s closing price of $9.5, a cumulative decline of over 57%.
New Oriental responded to muddy water’s questioning yesterday, saying that the essence of the company’s business will not be affected by the VIE structure and franchisee, and adding that muddy water is writing a fiction.
Earlier today, New Oriental announced a $50 million share repurchase program; management plans to use their personal funds to purchase aggregately $50 million of the ADSs in the open market within three months. Catalyzed by this, EDU stock price moved up, but still below the price prior to the event.