The New York Stock Exchange (NYSE) has commenced proceedings to delist Chinese online education platform Zhangmen Education Inc., which failed to keep its global average market value above at least $15 million for 30 consecutive trading days. Trading of the company’s American depositary shares (ADSs) was suspended at the NYSE on June 2.
In April of this year, Zhangmen Education received a warning letter from the NYSE after it failed to meet the market value requirements and because its shareholders’ equity was less than $50 million. As of December 31, 2021, the company’s shareholders’ equity was about -$132.9 million.
Zhangmen Education was established in 2005, focusing on offline academic tutoring services, and it has obtained nearly seven rounds of financing, with the total amount of funds as high as several billion yuan. There were many star institutions such as Shunwei Capital and Softbank Vision Fund as its investors. On June 8, 2021, Zhangmen Education was launched on the NYSE, raising $41.7 million.
After the introduction of the “Double Reduction” education policy in China, the company has promoted a new strategic layout and has accelerated organizational transformation and upgrades. In October last year, the company announced that it would jointly launch a personalized smart education platform with the intelligent visual analysis team of East China Normal University, relying on cutting-edge intelligent technologies such as big data, AI and cloud computing.
Two months later, Zhangmen Education announced the establishment of a software-as-a-service (SaaS) division, which provides educational SaaS pre-class and after-class services for teachers and students, online teaching and parent interactions. In February this year, it launched its first “Smart Tablet Learning Machine” with built-in synchronous teaching auxiliary resources and comprehensive literacy content of nine subjects from primary school to high school, entering the smart education hardware field.
The firm’s latest financial report shows that in 2021, Zhangmen Education’s revenue was 4.404 billion yuan ($662.1 million), up 9.6% year-on-year. Its net loss was 1.177 billion yuan, compared with 1.012 billion yuan in the same period last year. The net loss attributable to ordinary shareholders of the parent company was 3.395 billion yuan, compared with 1.952 billion yuan last year.