On November 22nd, Red Star Capital Bureau reported that Chengdu police have just reported that after investigation and investigation, Chen Moujie (male, 39 years old) is suspected of opening a casino. At present, Chen Moujie has been arrested in accordance with the law, and the case is under further investigation.
On the evening of the 21st, Douyu (DOYU.US) announced that on November 20, 2023, the company learned that the CEO and Chairman of the Board, Chen Shaojie, had been arrested by the police on or around November 16, 2023.
Regarding the reason for his arrest, Douyu stated that the company has not received any formal notice regarding the investigation into Mr. Chen or the apparent reason for his arrest.
Douyu mentioned in the announcement that the company is unable to comment on the nature or expected timeline of potential legal proceedings that may follow; The coercive measures being taken against Mr. Chen, as well as any subsequent legal proceedings and coercive measures against relevant parties, may have a significant adverse impact on the company's reputation, business, and operational results. The company maintains the normal operation of its business and continues to be committed to maintaining its platform in compliance with regulatory requirements. The board of directors and management will oversee the company's operations and develop emergency plans to respond to Mr. Chen's arrest and related investigations.
In response, the Douyu side told the media that everything is subject to the announcement. Perhaps influenced by this news, Douyu's stock price fell, with the US stock market falling 4.37% to close at $0.92/ADS. Its market value was only $308 million, a 95.3% decrease from its peak in 2021.
According to public information, Chen Shaojie was born in 1984 and his last public appearance was a conference call after Douyu's second quarter financial report on August 14th. At that time, he stated that he would continue to build a healthy and sustainable gaming community ecosystem for Douyu, attach importance to the operation of core users, implement the development strategy of "a diversified content ecosystem platform centered on games", and be committed to the production of high-quality content and innovation of product models.
In July 2019, Douyu was listed on NASDAQ. In 2020, it was rumored that Huya and Douyu would complete the merger under Tencent's negotiation, but it ended in failure. After the merger failed, Douyu's situation became increasingly difficult. According to financial reports, from 2019 to 2022, Douyu's revenue was 7.283 billion yuan, 9.6 billion yuan, 9.165 billion yuan, and 7.108 billion yuan, respectively. The revenue growth rate has been declining year after year, and even negative growth has occurred since 2021.
According to the financial report, Douyu's net profit for the second quarter was 61.4 million yuan, a year-on-year increase of 161%. However, its total revenue was 1.392 billion yuan, a year-on-year decrease of 24.1%, and it has been on a downward trajectory for three consecutive years. As of now, Douyu has not released its third quarter financial report.
Not long ago, on October 25th, Douyu announced that due to the past 30 consecutive working days, the closing price of Douyu's American Depositary Stock (ADS) has been below the minimum buying price of $1. If the stock price does not return above $1 by April 22, 2024, it may face delisting.