The artificial intelligence (AI) company around education & training services LAIX Inc. (NYSE: LAIX) has seen its share price surged by 59.77% to $4.09 on Friday. Shares of the Chinese company listed on Wall Street have also been soaring today in the pre market session. As of 07:55 a.m. EST, the stock was at an uptrend of 34.23% priced at $5.49.
What does the company do?
LAIX is a provider of artificial intelligence (AI) products and services aimed at helping Chinese people learn English. Its proprietary AI teaching assistant uses a combination of the most advanced deep learning technologies, big data, well-established education pedagogies, and mobile internet to prepare users for college and careers. LAIX aims to fundamentally transform learning by introducing innovative approaches. LAIX’s products and services are provided by mobile apps – most notably, “English Liulishuo”, which was released in 2013.
So what’s driving stocks up?
Shares of LAIX as well as several other Chinese educational companies with a limited number of shares available remained strong in the weekend session. Opening at $8.06 against a previous close of $2.56, Laix stock soared as much as 355% to hit the $11.65 mark during that session.
There was some discussion of some of these stocks on social media website Reddit and Twitter, but not to the extent that the recent uproar over the stock of Game Stop Corporation which has sent its prices skyrocketing.
Also, a fluent internal employee on the Chinese social media platform of “Maimai” hinted at the beginning of January 2021 about optimization by the company saying that the optimized person will get an N+1+double salary and one month of social security allowance. Another employee said the company would have 2,900 staff in 2020, and after optimization, only 1,500 will remain.
How analysts see this:
However, analysts point out that social media is most likely to have a larger influence on smaller cap stocks. But, unlike GameStop and other stocks at the forefront of the recent retail rally, there were very few short positions in LAIX Inc. [LAIX].