DOYU.US

The livestream gaming platform unveiled new leadership more than a year after the arrest of its CEO, in a bid to overcome challenges on multiple fronts

By Teri Yu

Online livestream game platform DouYu Holdings Ltd. (DOYU.US) on Thursday named a new co-CEO, filling a prolonged leadership vacuum. Simultaneously, the company also declared a massive special cash dividend in a bid to entice investors to its stock.

The company said Ren Simin will become its new co-CEO effective immediately, filling a vacuum since the arrest of founder and CEO Chen Shaojie in November 2023. At that time Chen was reportedly detained for suspected involvement in operating a gambling business and allowing DouYu’s platform to host pornographic, vulgar and other sensitive content.

Since then, an interim committee has overseen the company’s operations. The absence of strong leadership, especially in the face of contracting revenues, took a toll on DouYu’s stock, causing the company’s market value to plummet to around $285 million from $3.7 billion at the time of its IPO in 2019.

“Given our current cash position and strategic business plan, we continue to focus on improving our operational efficiency and endeavour to overcome the challenges of the macroeconomic and operating environment in order to support the company’s long-term development,” said Ren.

Ren joined DouYu in June 2021 and previously served as vice president, overseeing project management and compliance.

On the same day of Ren’s appointment, DouYu also declared a special cash dividend of $9.94 per share – equal to a hefty 80% of the company’s closing stock price on Wednesday. Following the pair of announcements, DouYu’s shares surged 27.7% to $15.69 in the Thursday trading session. The stock has nearly doubled over the past 12 months.

This wasn’t the first time DouYu distributed a special dividend. Last July, the company announced a similarly large special cash dividend of $9.76 per share, which was equal to almost half of its share price of around $18 at that time.

Tencent-backed DouYu was founded by Chen in 2014 and was thriving at the time of its U.S. IPO in 2019 amid strong popularity for livestreaming games. However, the company has faced intense competition from rivals such as Huya (HUYA.US), Kuaishou (1024.HK) and Bilibili (BILI.US; 9626.HK), and government restrictions on gaming by minors has also hurt its business. Most recently, a slowing economy has also caused livestreaming fans to curtail their spending.

All of those factors have taken a toll on DouYu, whose performance has repeatedly underwhelmed investors in the last three years. In last year’s third quarter, the company reported its revenue fell 21% to 1.06 billion yuan ($151.5 million). Its core livestreaming revenue plunged 34.7% year-on-year to 752 million yuan, primarily due to a decline in both total paying users and average revenue per user. Its quarterly adjusted net loss stood at 39.8 million yuan, compared to an adjusted 71.9 million yuan profit a year earlier.

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