Chen Shaojie, the CEO of Douyu, has gone missing.
Capital markets are in shock!
Related terms have also surged in online trends. Can you imagine that this CEO once propelled Douyu’s market value to nearly $50 billion?
It’s important to note that when Douyu went public on the US stock market, its market value was $3.68 billion. At its peak in early 2021, the market value reached $6.5 billion (about 47.3 billion yuan). However, since then, the stock price plummeted, and it’s now worth less than $300 million, experiencing a 96% drop!
As one of the top gaming live streaming platforms, Douyu has been in fierce competition with Huya for several years. In recent years, it has also been contending with emerging forces like Douyin, Bilibili, Kuaishou, and more.
Despite its historical advantages, issues like top streamers leaving, the rise of new competitors, and efforts to clean up explicit content have put Douyu in a tough position in this competitive live streaming landscape.
But at such a critical moment, the CEO, who is considered the backbone of Douyu, has suddenly gone missing. How far can Douyu, which relies on edgy live streaming, go without him?
01
Recently, the news of “Chen Shaojie’s disappearance” has been spreading like wildfire on the internet, making the CEO of a billion-dollar live streaming platform a hot topic.
According to reports from Cover News, multiple sources have revealed that Chen Shaojie, the founder, chairman, and CEO of the live streaming platform Douyu, has gone missing in recent days. There are even rumors that he is under investigation and has been missing for at least three weeks.
As the CEO of a publicly traded company, Chen Shaojie hasn’t made many public appearances in recent years. His most recent appearance in the public eye was when he attended the second-quarter earnings analyst conference call on August 14th of this year.
According to Enterprise Check App, Douyu’s affiliated company, Wuhan Douyu Network Technology Co., Ltd., was established in May 2015, with Gao Jie as the legal representative and registered capital of approximately 22.34 million yuan.
Shareholder information shows that Chen Shaojie is the largest shareholder in the company, holding a 50.2271% stake.
As reported by The Paper, an insider from Douyu mentioned that the company’s operations are currently normal and have not been affected.
Regarding Chen Shaojie’s disappearance, it might be related to illegal and improper activities in Douyu’s live streaming rooms. Rumors in the industry suggest that Chen Shaojie’s disappearance could be related to the “Changsha Rural Daredevil Team,” a live streaming room on Douyu.
Despite industry efforts to combat such behavior in recent years, some platform insiders may still be colluding with and sharing profits from improper live streaming rooms.
An industry insider mentioned that some live streaming platforms have featured “soft gambling live streaming rooms” registered by “shell companies,” and often platform personnel are involved, with gambling funds being distributed through these “shell companies.” In these larger live streaming rooms, the amounts involved can be in the tens of millions.
In September 2020, Douyu’s “Shan Shan Jiuhu Wai” live streaming room was exposed by multiple media outlets for suspected gambling activities.
According to third-party data, in 2020 alone, their revenue exceeded 100 million yuan. In the end, the streamers involved were sentenced to six years in prison, while others received probation or fines.
In public information, two months before the crackdown on “Shan Shan Jiuhu Wai,” there was a change in the business registration of Jiutu Culture, the live streaming guild behind it, with the addition of Wuhan Douyu Yule Network Technology Co., Ltd. The largest shareholder of Jiutu Culture was Fu Hailong, and the legal representative was Pan Bin, who are later revealed to be the individuals sentenced as “Fu Moumou” and “Pan Moumou.”
However, at the time of writing, Douyu has not disclosed further details related to Chen Shaojie.
Regardless of how this situation unfolds, we believe that the authorities will eventually provide an answer. If Chen Shaojie has indeed committed any unlawful acts and is being investigated or detained, it would indeed be a shocking development!
02
Speaking of Douyu’s CEO, Chen Shaojie, he is a legendary figure.
Born in 1984 in Jinan, he developed a passion for gaming from the 5th grade of primary school, and in college, he spent nights in internet cafes. In his first year of college, he dropped out and became a “stay-at-home.”
After the Chinese New Year in 2006, the 21-year-old Chen Shaojie arrived in Wuhan. With ten years of gaming experience, he quickly found a job developing a game competition platform.
Later, he founded his own company and, at the age of 25, sold his first company to Shanda, earning his first fortune.
In 2010, he acquired the “original ACG website in China,” A Station, and established A Station’s “live broadcast” channel.
Although A Station is not as prominent today, it could have become the equivalent of Bilibili if it had developed successfully. A Station was also the first website to introduce the “danmaku” commenting system, which later became popular across the entire internet.
Four years later, Chen Shaojie separated the “live broadcast” channel from A Station and renamed it “Douyu TV.”
Regarding the name, Chen Shaojie openly stated that “Douyu” is a type of aggressive fish in Thailand.
As one of the few streaming platforms in China focused on gaming, Douyu received a 20 million yuan angel investment shortly after its founding. In April 2014, Douyu officially went live.
In the following years, the gaming live streaming industry rapidly expanded, and Douyu successfully attracted investment from Tencent, gradually building a content fortress around Tencent games like “League of Legends,” “Honor of Kings,” and “Dungeon & Fighter.”
In July 2019, Douyu was listed on NASDAQ, and on the day of its IPO, its market value approached $4 billion.
Chen Shaojie’s personal wealth also soared. In October of the same year, his net worth reached 2.5 billion yuan, according to the 2019 Hurun China Rich List.
03
Douyu’s IPO marked its peak, and it seemed like Chen Shaojie’s success story was complete.
On December 31, 2019, Wuhan Douyu Yule Network Technology Co., Ltd. underwent a change in its business registration, with Douyu’s founder, Chen Shaojie, resigning as the company’s legal representative, general manager, and executive director, and Gao Jie taking over.
In 2020, as two major gaming streaming platforms in China, Huya and Douyu, were in talks to merge under the guidance of Tencent, it attracted significant attention from the capital market.
However, the merger eventually fell through, and with the rise of platforms like Douyin, Kuaishou, Bilibili, and others in the gaming streaming market, Douyu’s situation became increasingly challenging, to the point of being in dire straits.
Faced with the pressure from short video platforms, Douyu’s daily active users began to decline. According to data, in the fourth quarter of 2021, Douyu’s mobile MAU (monthly active users) was 62.4 million. By the fourth quarter of 2022, it had fallen to 57.4 million. In the second quarter of this year, it dropped to 50.3 million. In contrast, platforms like Douyin, Kuaishou, and Bilibili reached hundreds of millions of MAU back in 2020, far surpassing Douyu.
The decrease in users also led to a decline in Douyu’s revenue. Douyu’s 2022 annual report shows revenue of 7.108 billion yuan, a year-on-year decrease of 22.44%. This marked the second consecutive year of declining revenue for the company.
The 2022 loss was 75.42 million yuan, a decrease of 87.04% compared to 2021.
In the first quarter of this year, Douyu’s revenue was 1.48 billion yuan, a 17.4% decrease year-on-year. In the second quarter, it dropped to 1.39 billion yuan, a 24.1% decrease, marking a new low in six quarters.
In fact, Douyu’s struggles were evident when it went public. According to Douyu’s prospectus, the company had accumulated losses of 2.272 billion yuan from 2016 to 2018, despite an upward trend in operating revenue. The revenue increase was primarily due to stimulating user consumption activities in preparation for the IPO.
04
This year, Douyu has been in a constant state of turmoil!
Due to issues with the platform’s content, Douyu attracted the attention of regulatory authorities.
In April, Douyu was the only company named in the first-quarter “Clean Internet” review by the Cyberspace Administration of China, and it was summoned and punished for the second time due to issues like the dissemination of explicit content.
In May of this year, in response to the severe ecological issues of pornography and vulgarity on the Douyu platform, the National Internet Information Office guided the Hubei Provincial Internet Information Office to send a working group to Douyu for a one-month intensive rectification and supervision.
Being named by the authorities twice in one month for violations prompted a response from the secondary market. After this news was announced, Douyu’s US stock price briefly dropped by as much as 15%.
According to Tianyancha data, Douyu’s issues with “edgy” content have been ongoing problems, and the company had been subject to multiple administrative penalties in the past.
Currently, Douyu’s stock price has fallen to $0.842 per share, a drop of over 90% from its initial trading price of over $20, and the market value is now only $269 million.
Originally, Douyu was co-founded by Chen Shaojie and Zhang Wenming, both of whom served as CEOs.
However, at the end of 2021, Douyu announced changes in its management team: Zhang Wenming voluntarily resigned from the position of director and co-CEO for personal reasons. Chen Shaojie became the sole CEO.
According to company documents, as of March 31, 2023, Chen Shaojie held a 17% stake, while Zhang Wenming has disappeared from the list of directors and executives, with a stake of less than 1%.
This move may have avoided potential disagreements but also made Chen Shaojie the most crucial figure in the company, especially since all key phases of Douyu’s development were handled by Chen Shaojie and Zhang Wenming. Later, when Zhang Wenming left, Chen Shaojie became the sole backbone of Douyu.
According to the “2022 China Esports Industry Report,” by 2022, the global audience for game live streaming had grown by 13.8% compared to 2021, reaching 921.2 million people. The global live streaming audience is expected to surpass one billion and reach 1.4 billion by 2025. China has the largest market in the world.
The rise of short videos has created a dual competition for live streaming platforms in terms of traffic and advertising monetization. At the same time, the oversight of live streaming content and rewards is constantly improving. How live streaming platforms can return to producing high-quality content and achieve user growth will be the key to overcoming the challenges in this industry.
At this critical moment, Chen Shaojie’s disappearance will undoubtedly deepen various speculations in the public eye.
With the absence of their CEO, where does Douyu’s future lie?