Why RLX Technology Inc. (RLX) stock is falling today?

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Shares of RLX Technology Inc. (RLX) fell over 41.11%. RLX stock price was down by 33.61% to drop $12.92 a share at the time of this writing. It seems that RLX stock happened to be down after the spread of the news that Chinese regulators are planning to introduce laws to govern the sales of e-cigarettes in line with ordinary cigarettes.RLX stock was green at the previous closing with a gain of 4.85% and  $19.46 per share price. Let’s dive deeply to explore the current scenarios.

What’s happening?

Two of China’s regulators namely, the Ministry of Industry and Information Technology (MIIT) and China’s State Tobacco Monopoly Administration recently posted the draft that explains the rules and regulations for the sale of E-cigarettes. These new laws might affect the sales of E-cigarettes as well as other tobacco products thus lowering the potential revenue in this fastest growing industry.

In 2019, the Chinese regulators had forbidden the sale of e-cigarettes through an e-commerce platform that greatly affected the growth of this business and many brands in response to that restriction shifted themselves from online seller to offline seller.

In the first week of March 2021, RLX appointed Professor Youmin Xi to be an independent director to its board of directors. Professor Youmin is now serving as a member of the audit committee, compensation committee, and corporate governance committee of RLX Technology’s board.

About RLX Technology

RLX Technology Inc. (RLX) is the leading brand of e-vapors products in the People’s Republic of China.RLX operating areas include research, development, manufacturing, and distribution of e-vapors products in China. RLX Technology is founded in 2018 and headquartered in Beijing, China.

Conclusion:

The recent news about the governing laws for the sale of e-cigarettes and other tobacco products has added pain to the RLX stock as RLX Technology stock fell more than 41.11% in Monday’s current market session. Let’s see how the RLX management will react to this situation and its fourth quarter and fiscal year 2020 results to be announced on March 26, 2021, will further decide the fate of the stock.

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