Red and Yellow shares shrink, market value evaporates by $300 million What warning does it give to pharma?

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25 Jul,2024

Red and Yellow shares shrink, market value evaporates by $300 million What warning does it give to pharma?

Following the Ctrip Parent-Child Park child abuse case caused strong social concern, "China's first independently listed pre-school education brand," red and yellow blue was again exposed to child abuse. The bad behavior, such as sticking needles, feeding pills, standing naked and even molesting children, made the matter quickly fermented in public opinion and triggered an uproar.

This is not the first time a similar incident has occurred. From the Zhejiang Wenling kindergarten teacher abused children nearly 100 times, to a kindergarten classroom in Shanxi even slapped children more than 70 slaps, to a kindergarten in Hebei, 3 years old and a half boy was physically punished by the caregiver, and then to the recent Ctrip, red and yellow incident, the child abuse incident seems to have never disappeared from people's attention in the line of sight.

The key question is, why do kindergarten child abuse incidents happen again and again? Leaving aside the state of mind and moral quality of the people involved, what is the bottom line that they dare to commit this unlawful act?

The answer is basically clear: the low cost of violating the law. From past reports, the final result of the relevant child abuse cases, nothing more than kindergarten teachers to the victimized children and families to apologize, or to give part of the compensation, serious, but also nothing more than the kindergarten teachers involved in the dismissal, or briefly by the public security organs to control, and therefore the real in the criminal penalties, few and far between, for the institutions involved in the punishment, also rarely seen.

But what are the organizations involved afraid of? It is also very obvious: market performance. As a U.S. listed company, red and yellow kindergarten child abuse incident broke out, soon the capital market gave a reaction: the share price shrinkage of more than 40%, has fallen below the issue price, the market value of evaporation of 300 million U.S. dollars. Red and yellow blue also had to take out the first time 50 million dollars for share repurchase, but the effect is very little.

On the surface, red and yellow blue in the field of early childhood education, and the pharmaceutical field and what is the relationship? But in fact, despite the industrial field is far away, but the red and yellow blue in the crisis under the market performance, has been enough to let all the pharmaceutical companies to cause alarm: if the status quo of low cost of violation of the law is not enough to make the pharmaceutical enterprises to enhance the awareness of compliance, but because of the crisis on the market value of the performance of the company's reputation is a fatal thing!