February 17, 2023 | Eul Basa

A Billionaire No More: The Sudden Fall Of Larry Chen

It only took six months for Larry Chen to lose his billionaire status. The Chinese businessman, who was formerly among the world's richest with a net worth of $10.2 billion, took a financial hit as China began cracking down on private education. His company Gaotu Techedu Inc., which provides an online tutoring service, plummeted by almost two-thirds in the New York Stock Exchange (NYSE), making it now worth just $336 million according to Bloomberg's Billionaires Index.

China has implemented new regulations that prohibit companies like Chen's to make profits, raise capital, or go public. The move is in line with growing criticism for the country's private education sector—many of China's for-profit educational businesses operate on excessive workloads and prohibitive expenses that make it difficult for Chinese families to rely on their services.

Under the new regulations, online tutoring services will no longer be approved to teach China's school syllabus and those who wish to do so will need to apply for licenses and undergo review. In fact, some citizens have even claimed that the high cost of education is the main reason why they are not having more children. Such is counterproductive to China's recent authorization of three kids per family for this year, which was rolled out in order to boost the country's numbers amid an ongoing population decline.

"The after-school tutoring industry has been severely hijacked by capital," said the Ministry of Education in a recent statement. "[This] runs against the nature of education as welfare, and harms the normal education ecosystem."


The recent changes have added to Gaotu's mounting financial struggles—since late January of this year, the company has lost over $15 billion due to poor stock performance. Despite these setbacks, Chen said on Weibo, a Chinese version of Twitter, that Gaotu "will comply with the regulations and fulfill social responsibilities."

Some of Chen's contemporaries have also taken the blow from China's latest updates. Zhang Bangxin, the CEO of TAL Education Group, experienced a $2.5 billion drop in wealth after his company's shares tanked 71 percent in the NYSE. Luckily for him, the drop wasn't substantial enough to lose his billionaire status, and he is still worth $1.4 billion today.

On the other hand, Yu Minhong, the chairman of New Oriental Education & Technology Group Inc., lost his billionaire status as Chen did after losing $685 million from a 54 percent drop. His company is now only worth $579 million after the substantial losses.

Like Gaotu, TAL and New Oriental have also pledged to abide by the new regulations as well as seek government assistance.



Things Only Wealthy People Know Exist

There are a million things that money can buy—and a lot of them are things that most people don't even realize are an option. Here's a glimpse into the secret world that only the richest of the rich have access to.
May 21, 2024 Jamie Hayes
Homestead Budget Internal

How to Start a Homestead On A Budget

Uncover 10 steps to starting your homestead on a budget. Find out how you can get supplies, plants, and even animals basically for free, and how to maintain it all for next to nothing.
May 17, 2024 Allison Robertson
Jobs2024 Internal

The Highest Paying Jobs You Can Get Without A Degree

Having higher education is often associated with higher-paying job prospects, but that isn't always the case. Some jobs don't need you to have a degree to make a decent living—all you need is a high school diploma or equivalent.
May 14, 2024 Eul Basa

20 Billionaires Who Actually Started Off Poor

Most of the world's wealthiest people were born pretty darn wealthy to begin with. But the American Dream can come true—just ask any of these true self-made billionaires.
May 11, 2024 Jamie Hayes

18 Thrifty Gift Ideas for Mom

Uncover 18 gift ideas you can find for your Mom at the thrift store. Not only is thrifting easier on your wallet, it's also a sustainable choice, and provides the opportunity to find a diamond in the rough. From the interior design mom to the sporty mom, there's something for everyone at the thrift store.
May 10, 2024 Penelope Singh
Great Wealth Transfer Internal

The Great Wealth Transfer

Uncover the truth about The Great Wealth Transfer, dubbed "the greatest wealth transfer in history." Find out which generation will benefit the most from those before them, and what might happen to the money they inherit.
May 9, 2024 Sammy Tran

Dear reader,

It’s true what they say: money makes the world go round. In order to succeed in this life, you need to have a good grasp of key financial concepts. That’s where Moneymade comes in. Our mission is to provide you with the best financial advice and information to help you navigate this ever-changing world. Sometimes, generating wealth just requires common sense. Don’t max out your credit card if you can’t afford the interest payments. Don’t overspend on Christmas shopping. When ordering gifts on Amazon, make sure you factor in taxes and shipping costs. If you need a new car, consider a model that’s easy to repair instead of an expensive BMW or Mercedes. Sometimes you dream vacation to Hawaii or the Bahamas just isn’t in the budget, but there may be more affordable all-inclusive hotels if you know where to look.

Looking for a new home? Make sure you get a mortgage rate that works for you. That means understanding the difference between fixed and variable interest rates. Whether you’re looking to learn how to make money, save money, or invest your money, our well-researched and insightful content will set you on the path to financial success. Passionate about mortgage rates, real estate, investing, saving, or anything money-related? Looking to learn how to generate wealth? Improve your life today with Moneymade. If you have any feedback for the MoneyMade team, please reach out to [email protected]. Thanks for your help!

Warmest regards,

The Moneymade team