BEIJING, November 7 (TMTPost)— The U.S.-listed shares of DouYu International Holdings Limited dived around 10% Monday after news about its CEO Chen Shaojie’s missing swirled.

Credit：Visual China

This is a further blow for the Tencent-backed Chinese game-centric live streaming platform after it received a delisting warning from Nasdaq Stock Market LLC because the close bid price of its shares was below the minimum required US$1.00 per share for 30 consecutive business days. As of Monday, shares have plummeted more than 95% from the peak in March 2021.

Douyu’s 39-year-old founder Chen Shaojie has been inaccessible for weeks and could neither be contacted nor located by his colleagues, reported Cover News, the digital platform under Chengdu-based newspaper West China City Daily. Another Chinese digital news media outlet The Paper learned that Chen has been out of contact since October. Chen has been out of touch for nearly three weeks, TMTPost App confirmed from multiple sources. The reason for inaccessibility could be that Chen was taken away by authorities to assist in an investigation, a person familiar with the matter told TMTPost.  

Douyu is still working to figure out Chen’s situation internally, the company later responded to TMTPost. All the company’s operation remains normal and is not affected by the recent news, The Paper cited an insider.

Recent talks in the industry said Chen’s being incommunicado may be fallout of illegal activities on Douyu’s live stream rooms, especially one called Changsha Rural Death Squadron. The streaming room was reported to take advantage of Douyu's various lottery rules to conduct suspected gambling activities. If viewers purchase designated props within a period of time, they can participate in virtual currency draws worth of from RMB1,000 to tens of thousands of yuan in that room. The room raked in RMB177 million in the year 2020, with the highest daily turnover of RMB13.11767 million, according to statistics from the third-party live streaming data platform. However, the streaming room has been exposed by many media as being involved in gambling in 2021, and can no longer be searchable at Douyu platform. 

Prior to news about Chen’s disappearance, the WeChat account of Hangzhou-based Chinese law firm Kinding posted an article on October 13, claiming that they learned an official of a major live streaming platform was arrested by police in Sichuan province on suspicion of opening a casino. In China, activities related to gambling are subject to administrative penalties and even criminal liability in serious cases. The article soon aroused speculation that the person aforementioned was Douyin’s leader Chen Shaojie. But Kinding said on Monday that its article has nothing directly to do with Chen’s status of incommunicado. TMTPost found the article is unavailable for reading at the law firm’s post list.

Douyin has become the regulator’s target for illegal practices at its platform these years. The company was levied maximum fines for fostering and spreading obscene, pornographic and vulgar content in 2021. The National Office for the Fight against Pornography and Illegal Publications said Douyin publicizes obscenity, gambling, violence and abets these crimes, endangering social morality and traditional Chinese culture. On February 2022, Douyin was named in the Cyberspace Administration of China (CAC)’s campaign to fight pornography and was given a deadline for rectification and fined according to the law.

On May 8, CAC instructed its Hubei provincial branch to dispatch a team of officials to launch a rare month-long on-site inspection to address serious problems, including pornographic and other vulgar content. DouYu became the only company singled out twice in Chinese internet watchdog’s cracking down on pornography and vulgar content in 2022 and 2023. The Wuhan-headquartered company that month said it will fully cooperate with the inspection, and it is concurrently conducting a comprehensive internal review of its content monitoring system. The company vowed to implement all necessary remedial measures based on the CAC inspection and its own internal review.