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Yeah1 can suffer a loss of 12 million USD because its business 'pet'

Friday - 08/03/2019 18:27
The incident with YouTube may have caused Yeah1 to account for a loss of $ 12 million for an investment in ScaleLab - the company was purchased earlier this year.
Yeah1 can suffer a loss of 12 million USD because its business 'pet'
Yeah1 can suffer a loss of 12 million USD because its business 'pet'
Ho Chi Minh City Securities Joint Stock Co (HSC) has just released a number of comments on YEG Group's Yeah1 stock after it received a notice to terminate the content storage agreement from YouTube. In the worst scenario, negotiating failed, Yeah1 Network, ScaleLab and SpringMe will no longer be YouTube's multi-channel partners.

This makes Yeah1 no longer recognizes third-party channel management revenue, makes provisions and records a $ 12 million loss for its investment in ScaleLab - a US company that specializes in content optimization and Maximize viewers on YouTube. This is the amount Yeah1 paid for the shares at the beginning of the year. This update report does not mention how Yeah1 has to deal with the remaining $ 8 million of the deal if ScaleLab achieves the target of the deal as agreed.

Previously, the consolidation of ScaleLab helped Yeah1 become one of the three largest multi-channel partners (MCN) worldwide with over 3,000 channels and 6.9 billion views per month. Yeah1 expects to use ScaleLab as a springboard to explore the international market and optimize costs by bringing top management and content creation to low-cost countries like Vietnam,

HSC adjusted down net revenue this year of Yeah1 to VND 1,807 billion, 64% lower than the previous forecast of VND 2,830 billion. Profit after tax of parent company shareholders also decreased by 83.3%, only over VND 26 billion.

The current fair value of YEG shares is VND 171,133. While before that in late February, HSC used a partial valuation method to estimate fair value of VND 321,000.

On the stock exchange, YEG shares are experiencing a fifth consecutive session, causing the market price to fall from VND 245,000 to VND 170,600. Market capitalization has been "blown" by over VND 2,300 billion. Yesterday's session of YEG recorded a sudden liquidity with nearly 600,000 shares being traded. In which, about 120,000 shares were traded in agreement at floor price.

Yeah1's media representative said that it has not yet estimated the damage from the operation of YouTube. The management of this company is focusing on negotiating with YouTube and initially has positive signals. Official working results are expected to update before March 11.

Yeah1 started providing entertainment services combining advertising through becoming YouTube's Multi-Channel (MCN) partner from 2015. The company's role, can be understood simply, is an intermediary connection between video content creators and YouTube.

In fact, the owners of channels can work directly with YouTube to make money, but the current trend is to cooperate with MCNs to enjoy more benefits such as copyright protection, income tax support  and use copyrighted content to develop new products, optimize advertising space ...

Brands will pay YouTube directly to distribute ads to viewers. Split rate of YouTube and Yeah1 Network is 45-55. The company holds between 5% and 30% of the revenue received, the rest is paid to the channel owner.

Author: Translated by CoPhieuViet.Com

Source: Vnexpress newspaper

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