The latest: Game streaming company DouYu International Holdings Ltd. (DOYU.US) announced that Zhang Wenming resigned from his position as co-CEO of the company for personal reasons effective Dec. 7. The move will leave Chen Shaojie as the company’s chairman and CEO.

Looking Up: Zhang’s departure will leave Chen as the clear person in charge at DouYu, which has carved out a niche as a specialist in the booming area of e-sports.

Take Note: The departure of a top executive is rarely a positive sign, often reflecting turbulence within the company over its strategic direction.

Digging Deeper: DouYu has been struggling since China’s market regulator vetoed its planned merger with rival Huya (HUYA.US) earlier this year. The company’s website lists Chen as DouYu’s founder and CEO, and Zhang as its co-founder and co-CEO, both since May 2014. DouYu previously passed Huya to become China’s largest game streaming company, but has been struggling more recently and is now about half of Huya’s size in terms of market value. After two years of profitable operations in 2019 and 2020 the company started posting losses about a year ago. Its revenue has been declining year-on-year in each quarter since the first quarter of this year.

Market Reaction: DouYu’s shares rose 12% in the two trading sessions since the announcement. But year-to-date the stock has still lost about three-quarters of its value.

Reporting by Doug Young

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