Blue chip stock plummets after YouTube ‘incident’

While a series of stocks surged in Monday’s trading session, YEG was one of the few that lost out the most, down seven percent by the end of the session.

This was equivalent to a drop of VND17,100 ($0.74) per share, down to VND227,900 ($9.82), bringing YEG’s market capitalization down by VND520 billion ($22.42 million).

YEG shares plummeted in response to YouTube announcing it was terminating all Content Hosting Services Agreements (CHSA) after March 31 with all YEG’s subsidiaries or investment companies with business activities related to YouTube Adsense, the program that allows publishers on the video channel to serve advertisements by third parties, which in turn generate revenue for the content provider.

The termination would apply to several of YEG’s multi-channel network (MCN) companies it has control over, such as Thailand-based SPRINGme, US-based ScaleLab, and organic Yeah1 Network Pte Ltd.

The Yeah1 Group management has said it is seeking further clarification with YouTube regarding this action, and actively working with the video hosting website to prolong the CHSA’s after March 31.

In 2018 alone, YEG’s YouTube AdSense business contributed about $1 million to its revenue, equivalent to 13 percent of the group’s after-tax profit. However, the digital conglomerate has also diversified and pledged to generate revenue through different channels to ensure its overall development.

At the end of 2018, Yeah1 reported VND1.66 trillion ($71.58 million) in revenue, up 97 percent over the previous year; and VND180 billion ($7.76 million) in after tax profits, up 119 percent.

Founded in 2006, Yeah1 is Vietnam’s largest multi-channel media ecosystem, operating TV channels, movie studios, Youtube networks, and digital news.

It was also the first media company to go public, listing on the Ho Chi Minh Stock Exchange (HOSE) last June.

YEG shares are currently the second most expensive stock on HOSE, behind SAB shares of Vietnam’s largest brewer Sabeco.