2 Reasons Why Bilibili Stock is Down Today
2022.04.19 13:16
2 Reasons Why Bilibili (BILI) Stock is Down Today
Shares of Bilibili (NASDAQ:BILI) (HK:9626) are down over 2.5% in pre-open Tuesday after Hong Kong-listed shares tumbled more than 10%.
A few days ago, China’s regulator banned live streams of unapproved video games and streams of games and esports events outside of the country. In addition to the ban, the new regulation also urges streamers to steer clear of “traffic-oriented” aesthetics and “undesirable” behavior, encouraging them to communicate with fans in a “civilized” online environment.
The new regulation was imposed by China’s National Radio and Television Administration in a bid to curb gaming and internet addiction among minors in the country.
“Issues such as online live broadcast chaos and teenagers’ addiction to games have attracted widespread attention in the society, and it is urgent to take effective measures to strictly regulate them,” says the translation of the new regulation.
Last month, Chinese authorities said they are aiming to impose new restrictions on online gaming for minors, focusing on social media and live streaming. The authorities published a draft document of potential changes to collect the opinions of the public back then, though it appears that the regulator has already banned live streams of unauthorized games.
Secondly, it was reported yesterday that the Chinese video-sharing platform Bilibili is planning layoffs within its live streaming business division, according to the local news publication Xinshang.
In response to the reports, Bilibili said that its live-streaming unit remains healthy, citing improvements in the unit’s gross profit for three straight years. The company said the live-streaming business will play a key role in the company’s growth, adding it is actively hiring new talent.
The report says that Bilibili could be planning layoffs due to the imbalance between the company’s live-streaming business and a group of agencies. This is because Bilbili’s live-streaming unit allows agencies to use unlimited refunds that are above the industry standard, creating an imbalance in its live-streaming arm.
The purpose of these unlimited refunds is to encourage agencies to add more money to the platform in order to drive traffic.
Bilibili stock price closed 6.2% lower yesterday.
By Senad Karaahmetovic
