According to Xinhua News Agency, the CEO of Douyu has been arrested on suspicion of opening a casino. At noon on November 22, Dujiangyan Irrigation Project Public Security Bureau issued a police notice: "Our bureau has investigated and found that Chen Moujie (male, 39 years old) is suspected of opening a casino. At present, Chen Moujie has been arrested according to law. The case is under further investigation."
Source: Weibo
CEO arrested, stock price plummeted
On the evening of November 21, Douyu announced that Chen Shaojie, Chairman and CEO of Douyu's Board of Directors, was arrested by Chengdu police around November 16, 2023. At the time of the announcement, the company stated that it had not received any official notice regarding the specific reasons for Chen Shaojie's investigation or arrest. Today's Chengdu police announcement confirms rumors that Chen Shaojie's arrest is related to gambling on the Douyu platform, which may have a negative impact on the company's reputation, business, and operating performance.
According to Article 303 of the Criminal Law, those who gather to gamble or engage in gambling for the purpose of profit shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public surveillance, and shall also be fined.
Those who open casinos shall be sentenced to fixed-term imprisonment of not more than five years, detention or public surveillance, and shall also be fined; If the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years and shall also be fined.
Those who organize citizens of the People's Republic of China to participate in gambling outside the country (territory), with a huge amount or other serious circumstances, shall be punished in accordance with the provisions of the preceding paragraph.
After yesterday's announcement, the Douyumei stock market experienced a drop of over 10% before trading, and as of the close, the decline was 5.93%. At the beginning of 2021, the stock price of Douyu reached a peak of $20.54 per share, and has now dropped by over 90%.
According to public information, Douyu is headquartered in Wuhan and the company mainly engages in game live streaming business. In July 2019, Douyu was listed on NASDAQ with an IPO price of $11.5. As of November 21, the total market value of the company is approximately $290 million.
Douyu's live streaming business has always been the main source of revenue for the company. According to the 2022 annual report, the revenue share of Douyu platform's live streaming business reached 95.6%, and the annual paid users reached 15.5 million.
Douyu's revenue has been declining for two consecutive years, with a total revenue of 7.108 billion yuan in 2022, a year-on-year decrease of 22.44%; In 2021, the revenue was 9.165 billion yuan, a year-on-year decrease of 4.55%. In the 2023 semi annual report released by the company in August, the revenue of Douyu continued to decline, with a half year revenue of 2.875 billion yuan, a year-on-year decrease of 20.78%; Paid users decreased from 6.6 million in the same period last year to approximately 4 million.
Multiple violations of the main business
Previously, Douyu had been required to rectify multiple live streaming violations. On May 8, 2023, Douyu was named by the Internet Information Department due to serious ecological issues such as pornography and vulgarity. The Hubei Provincial Internet Information Office dispatched a working group to the Douyu platform to carry out a one month centralized rectification supervision.
The Douyu platform's online rewards have also faced doubts about "disguised gambling" for a time. In April 2023, multiple online platforms such as Douyu failed to fulfill their main responsibilities and failed to fulfill their management obligations for the information released by their users, resulting in the dissemination of harmful information such as obscene pornography, feudal superstition, prostitution, gambling diversion, and high interest loans online. The National Cyberspace Administration guided the local Cyberspace Administration to interview the responsible website officials in accordance with the law, order them to rectify within a specified period of time, dispose of the relevant accounts, and strictly deal with the responsible persons, And impose administrative penalties of fines separately.
In 2022, during the Clean Action of the Cyberspace Office, Douyu cancelled the cross live streaming room recharge and reward broadcasting function to reduce the stimulation of irrational consumption for ordinary users. In 2020, the well-known Douyu anchor "Send Nine Outdoor" was named by the Central Weibo of the Communist Youth League due to improper reward mode and other reasons.
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