(Yicai) June 7 -- Shares in East Buy Holding surged by as much as 7.4 percent today, after tumbling for days after the founder of the livestreamed e-commerce company’s parent firm apologized for saying that the platform was in a state of disarray.

East Buy’s share price [HKG:1797] closed up 2.4 percent at HKD15.32 (USD2). Earlier in the day it hit HKD16.06. The Beijing-based company lost more than 20 percent of its market value in the last five trading days.

East Buy is in a mess, Yu Minhong said during a live event on May 31. Yu has reached retirement age and will not be doing much business in the future, he added.

Yu apologized for the alarm his words caused to East Buy’s clients, shareholders and investors in an open letter today. “I did not mean that I will no longer be responsible for the operations of East Buy and parent firm New Oriental Education and Technology Group,” he added.

Yu was most probably referring to the recent loss of one of East Buy's key live sales hosts, who helped the firm successfully transform from an edtech company offering after-school tutoring services to a livestreamed e-commerce platform. Dong Yuhui, who was renowned for promoting products in both Chinese and English when live on air, left the firm in December last year to set up his own studio after conflicts with East Buy’s management.

East Buy fired its Chief Executive Officer Sun Dongxu after the incident. He was replaced by Yu, who is also chairman. With the departure of Dong, East Buy lost its knowledge-based style of live sales, and replaced it with ordinary hosts, leaving many of its customers dissatisfied.

East Buy’s net profit more than halved in the six months ended Nov. 30, 2023 from a year earlier, plunging 57 percent to CNY249 million (USD34.4 million), due to higher expenses caused by rapid expansion, according to its latest financial report. But revenue jumped 34 percent to CNY2.8 billion (USD386.6 million).

Editors: Dou Shicong, Kim Taylor