What’s new: Chinese game livestreaming platform DouYu International Holdings plunged as much as 10% Tuesday morning after the company disclosed the detention of its chairman.
Chen Shaojie, who founded DouYu in 2014 and also serves as the company’s CEO, was detained by police in the southwestern city of Chengdu on Nov. 16, Nasdaq-listed DouYu said in a Tuesday filing. Chen has been out of public sight since early November, raising uncertainty about his whereabouts.
DouYu hasn’t received official notice of the reasons behind Chen’s detention, the company said. It warned that the incident may have a significant adverse impact on the company's reputation, business, and operational results. Chen holds 17% of the company.
DouYu is operating normally but is working on contingency plans in Chen’s absence, it added.
Background: Wuhan-based DouYu is one of the largest game centric livestreaming platforms in China with over 50 million monthly active users in the second quarter this year.
But the company has seen a steady decline in revenue and users over the past two years as competition heats up and regulators tighten scrutiny on internet content. In the first half, DouYu reported 2.9 billion yuan ($405 million) in revenue, down 21% year-on-year.
The cybersecurity regulator in May criticized DouYu for distributing information related to pornography and gambling, and sent a special working group into the company for rectification.
DouYu debuted on Nasdaq in July 2019, but its shares have tumbled below one-tenth of its offering price of $11.50. DouYu closed at $0.962 a share on Monday, giving it a market cap of $308 million.
In 2021, DouYu in was poised to merge with rival Huya Inc. in a deal brokered by backer Tencent Holdings Ltd. The deal was nixed by regulators who cited concerns about unfair competition.
Contact reporter Han Wei (weihan@caixin.com)
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