Mobile Content Platform Qutoutiao to be Delisted from Nasdaq
According to the US Securities and Exchange Commission (SEC), Chinese mobile content platform Qutoutiao announced that it had received a determination letter from Nasdaq indicating the exchange’s intent to delist the company’s shares. The stock will be suspended from Nasdaq trading starting at market open on March 23. The company has decided not to challenge the decision.
Nasdaq’s decision to delist Qutoutiao was based on the exchange’s listing rule that a publicly held company must maintain a minimum market value of $1 million. Qutoutiao failed to regain compliance within a 180-day grace period. Additionally, the company was unable to meet the requirement of filing its interim financials for the second quarter of 2022 and maintaining a closing bid price of $1.00 or higher for its American Depositary Shares (ADS). As of March 21, the company’s stock price had declined by 58.89%, closing at $0.296 per ADS.
Qutoutiao was launched in 2016 as a Chinese mobile content platform. Two years later, it was listed on Nasdaq with an opening price of $9.10 per share. At the close of the first day of listing, the stock price per share rose to $15.97, with a market value of $4.662 billion.
Qutoutiao received $42 million in Series A financing from Chengwei Capital, Redpoint Ventures, and CMC Inc in the second half of 2017. In the first half of 2018, the company completed a Series B financing round raising over $200 million, led by Tencent, Xiaomi, and other investors. Later that year, in August 2018, Qutoutiao introduced strategic investors, including People.cn’s funds, with an investment of nearly $60 million.
Qutoutiao‘s success in China can be attributed to its ability to gain deep insights into the entertainment needs of people in less developed towns, who may have fewer working hours, less work pressure, and more spare time than those in more urbanized areas.
However, the company’s performance had markedly declined over recent years. In 2021, its annual revenue was 4.34 billion yuan ($630 million), down 17.89% year-on-year. In the fourth quarter of 2021, its revenue was 881 million yuan ($127 million), down 32.3% year-on-year.
SEE ALSO: Mobile Aggregated Content Platform Qutoutiao to Stop We Media Services
Qutoutiao has introduced a number of innovative businesses, including the online novel platform “Midu,” which was once an important source of revenue for the company. However, at the end of March 2022, Midu announced that its contracted works would be transferred to China Literature starting from April 1. China Literature is a company focused on building a deep and immersive intellectual property universe for the Mandarin-speaking world.
Over the past year, Qutoutiao had undertaken changes to its business and personnel. On April 21, 2022, the company issued a notice stating that it would be stopping the service and maintenance of its “We Media” platform. Additionally, in November 2022, Qutoutiao‘s chief financial officer, Zhu Xiaolu, resigned from the company.