OneSmart

At the end of 2021, Xi “Steve” Zhang was facing an existential crisis for himself and his business. OneSmart was a premium educational company founded in 2008 offering K-12 afterschool tutoring for students nationwide under a number of brands. The company was founded in 2008 and went public in 2018. The tutoring sector was big business in China, where parents focused resources on typically only children in a highly competitive education environment. But a suite of new regulations in 2021 capped the hours that tutoring firms could supply, the prices they could charge, and essentially banned afterschool tutoring for K-9 students. By 2021, OneSmart shares were trading on the NYSE at below the required $1 per share. Zhang had to make sense of what went wrong and what could be next.