On the early morning of January 3rd, the US stock market closed at $33.88 per share, a decrease of 14.66%, with a total market value of $2.06 billion.
Prior to this, Baidu announced on the first day of the new year that it would terminate the acquisition of YY Live (a live streaming product under Huanju) by its affiliated company MoonSPVLimited (hereinafter referred to as "Moon"). It is understood that Baidu originally planned to acquire YY Live for $3.6 billion.
A reporter from Securities Daily contacted YY Live regarding this matter, and the relevant person in charge said, "Please refer to the announcement. There is currently no further information available."
How will the termination of the acquisition affect both parties in the transaction? The report released by Morgan Stanley stated that this news is positive for Baidu, but not for Huanju.
Morgan Stanley stated that the live streaming business is not closely related to Baidu's core business, and Baidu's focus has shifted to generative artificial intelligence, abandoning acquisitions, which is beneficial for Baidu to increase its AI investment.
Zhang Yi, CEO and analyst of iMedia Consulting, said that the size of the entertainment live streaming market may shrink, and many of Huanju's businesses have shifted to overseas markets. It is expected that Baidu will abandon the acquisition at this node.
It is worth mentioning that the YY Live acquisition case began in November 2020. For gatherings, over three years have passed, and the environment in which the entertainment live streaming industry operates has already changed.
In 2020, there was a brief outbreak in the online entertainment industry, including live streaming. According to the Statistical Report on the Development of China's Internet released by the China Internet Network Information Center in 2021, as of December 2020, the number of live streaming users in China reached 617 million, an increase of 57.03 million compared to March 2020, accounting for 62.4% of internet users.
What is the performance of entertainment live streaming after 2020? Perhaps the gathered financial reports can reveal the development pressure faced by the industry.
According to the latest financial report disclosed by Huanju, as of the end of the third quarter of 2023, the global average monthly active mobile users of Huanju's entertainment platform were 276.8 million. It is worth noting that in 2020, amidst multiple challenges, the global average monthly active mobile users of Huanju Entertainment platform declined, reaching 393.7 million. Today, three years later, the company has lost nearly 30% of its monthly active users.
An industry analyst told Securities Daily reporters, "Currently, Baidu has paid $1.9 billion for Huanju. Compared to the value of YY live streaming, Huanju is not at a loss."