Yeah1 looks to sell off newly acquired subsidiary after just two months

By Minh Son   March 11, 2019 | 11:07 am GMT+7
Yeah1 looks to sell off newly acquired subsidiary after just two months
ScaleLab was expected to bring in around three billion Youtube views a month. Photo by Shutterstock/PixieMe

Yeah1 has decided to sell ScaleLab, a multi-channel network it acquired in January, following the termination of its contract with YouTube. 

The management board of the Vietnam digital media giant has passed a resolution allowing the company to transfer 100 percent of the shares it currently holds in ScaleLab in order to preserve investment capital and shareholder value. 

The Ho Chi Minh Stock Exchange (HOSE)-listed company (YEG) is yet to find a buyer for the US-based multi-channel network (MCN). 

Yeah1 board decision was made after YouTube unilaterally terminated its content hosting agreement with all of the media giant’s subsidiaries following a policy infringement by SPRINGme Pte. Ltd, a Thai MCN in which Yeah1 owns 16.93 percent.

However, Yeah1 also said that it will continue to negotiate with YouTube's senior team to salvage hosting agreement deals. 

Yeah1 acquired 100 percent of US-based ScaleLab for $20 million as part of its plans to expand worldwide in January 2019. With a roster of 1,750 influencers and 400 million subscribers, ScaleLab was expected to bring in around three billion YouTube views a month.

The five-year-old company was recognized as the fastest-growing media company in the U.S. by Inc. Magazine last September.

On the stock exchange, YEG stock has suffered 5 consecutive losing sessions after the incident with YouTube, driving its share price down from VND245,000 ($10.58) to VND170,600 ($7.37) a share. Consequently, the stock lost VND2.3 trillion ($99.32 million) in market cap, an approximate 30 percent decrease in value.

Founded in 2006, Yeah1 is Vietnam's largest MCN ecosystem, operating TV channels, movie studios, YouTube networks, and digital news. 

It was also the first media company to go public, listing on the HOSE last June.

 
 
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