Shares of digital media group Yeah1 took a nosedive on the local stock market today, May 23, as video-sharing site YouTube had officially terminated its Content Hosting Agreement (CHSA) with the local corporation and all its multichannel network subsidiaries, the local media reported.
Yeah1 sent a statement to the Hochiminh Stock Exchange in the morning to confirm the partnership termination with YouTube. According to Chairman Nguyen Anh Nhuong Tong, the content storage agreement between the two sides has ended, so YouTube started releasing channels cooperating with it and its subsidiaries from May 22.
At present, Yeah1 is adjusting its resources to focus on developing content and its own channels. However, the business results of the multichannel segment will be taken into account in the company’s financial report for the first quarter of 2019, according to the statement.
Earlier, YouTube decided to terminate its CHSA with the subsidiaries and associates of Yeah1 on March 31, including ScaleLab LLC and Thailand-based SpringMe Ptd Ltd.
YouTube noted that SpringMe, in which Yeah1 has a 16.5% stake, had violated YouTube’s policies on selecting and managing channels and videos, leading the platform to terminate its agreement with Yeah1’s subsidiaries and associates that run Adsense-based business activities.
On April 2, YouTube allowed the firm to keep storing content on its platform for another two weeks while negotiations between the two sides continued. However, the Vietnamese digital media company was unable to convince YouTube not to cancel its license.
CHSA is the license through which media companies gather earnings from third-party businesses that run ads on their channels.
In addition, Yeah1, in its statement, confirmed that it had completed procedures for the buyback of over 3.1 million shares, as announced on March 18. It is now waiting for approval from the State Securities Commission.
The group said it would not stop investing in and producing network content with YouTube as it is an important channel.
Aside from operating a multichannel network on YouTube, Yeah1 owns four nationwide TV channels and operates as a movie producer and distributor, advertising agent and digital advertisement publisher.
After the trouble with YouTube, Yeah1’s shares, under the code YEG, plunged to floor prices for 13 consecutive sessions, with its market capitalization vaporizing by nearly VND6.4 trillion by March 20. The firm debuted on the southern market in June 2018 at the starting price of VND250,000.
Closing today’s session, YEG again tumbled to the floor price at VND100,500, after advancing for five sessions in a row.