The impacts of the failed co-operation with YouTube are still haunting Yeah1 Group as the Ho Chi Minh City Stock Exchange has put its stock on alert.
|HSX will put Yeah1 Group's stock on alert from April 8 |
The Ho Chi Minh City Stock Exchange (HSX) on March 31 decided to put Yeah1 Group's stock (YEG) on alert from April 8 because of its tremendous losses last year. As soon as YouTube announced stopping work with the group in March 2019, 35 per cent of the shares' value evaporated immediately. As of now, YEG is around VND49,600 ($2.15), 80 per cent lower than its initial share price.
The prolonged plunge in its stock has worsened Yeah1’s performance. In 2019, the local media firm reported VND385 billion ($16.74 million) in net losses and VND1.449 trillion ($63 million) in revenue. It also recorded VND435 billion ($18.9 million) of revenue in the fourth quarter of 2019, down 32 per cent on-year. Notably, the spike in management costs and a $3.6 million provision resulted in losses of nearly VND158 billion ($6.87 million) in the quarter.
Regarding the breakdown with YouTube, Yeah1’s chairman Nguyen Anh Nhuong Tong said at the shareholders' meeting last year that it is a textbook lesson of the adage “Don’t build a house on someone else's land”. Due to the collapse, the company only set a 19 per cent revenue growth target for 2019, a marked reduction against the previous years’ 60 per cent. “In my 41 years of life I have never seen so many upheavals,” Tong said. “It will take at least six months to overcome the obstacles.”
In the middle of March, YouTube accused the multi-channel network SpringMe Pte., Ltd., in which Yeah1 owns 17 per cent of the shares, that some of its channels violated YouTube’s policies. This led to the global video platform stopping work with all other Yeah1’s firms running YouTube AdSense like Yeah1 Pte., Ltd., and ScaleLab LLC.
“Yeah1 upload about 400 hours of video content a day, which equals all other Vietnamese channels combined. Fast growth brings huge risks – and the problem with YouTube is a valuable lesson for us,” Tong added.
By Van Anh