Here is why Tarena International Inc. (TEDU) stock plummeted in the after-hours on Thursday?

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Tarena International Inc. (TEDU) shares plunged 15.22% in after-hours on Thursday, September 30, 2021, and closed the daily trading at $1.17. However, in the regular trading session of Thursday, TEDU’s stock gained 1.47%. TEDU shares have fallen 21.59% over the last 12 months, and they have moved down 7.38% in the past week. Over the past three months, the stock has lost 49.64%, while over the past six months, it has declined 57.01%.

Let’s see is there any reason behind its plummeting in the after-hours on Thursday?


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TEDU intention to terminate the merger agreement

On Sept. 30, 2021, Tarena International, Inc (TEDU) delivered a written notice to Kidedu Holdings Limited and Ascendent Capital Partners to terminate the Agreement and Plan of Merger with Parent and Merger Sub, due to the breach of the Merger Agreement by Parent and Merger Sub.

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Tarena International said that if both Parent and Merger Sub fail to cure their breaches by October 30, 2021, the company intends to terminate the Merger Agreement and will be entitled to the parent termination fee according to the Merger Agreement and other transaction documents.

TEDU recent financial results announcement

On September 24, 2021, Tarena International, Inc. (TEDU) released its unaudited financial results for the second quarter ended June 30, 2021.

Q2 2021 financial highlights

  • TEDU reported net revenue of 3 million(US$90.2 million) in Q2 2021 compared to RMB331.8 million in the same period of 2020.
  • In Q2 2021, gross profit was RMB294.4 million (US$45.6 million), compared to 7 million in Q2 2020.
  • Total operating expenses were RMB 385.11 million (US$59.6 million) in Q2 2021 compared to $389.5 million in Q2 2020.
  • It suffered a net loss of RMB76.7 million (US$11.9 million) in Q2 2021, compared to a net loss of RMB267.6 million in the second quarter of 2020.
  • Basic and diluted loss per American Depositary Share was 39(US$0.22) in Q2 2021, compared to a loss per ADS of RMB4.92 in the second quarter of 2020.
  • As of June 30, 2021, the company had cash cash equivalents and time deposits, including current and non-current, and restricted cash totalled 9 million(US$45.8 million) compared to RMB364.8 million as of December 31, 2020.

Q3 2021 financial outlook

For Q3 2021, the company is expecting net revenues in the range of RMB600 million to RMB630 million.

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Conclusion

Tarena stock went down in the after-hours after the company announced its intention to terminate the merger agreement. We can expect volatility in the coming days for TEDU stock until the company get some positive reply from the other concerning parties in the merger agreement.

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