🚫 DouYu $DOYU stock price is crashing as it seems that the merger with Huya is unlikely to happen, because of antitrust regulators in China. There have been antitrust probes on Chinese Big tech such as Alibaba $BABA and Tencent $0700.HK lately. Since Tencent owns 51% of Huya and 37% of DouYu and are going to own 68% of the new company, which will have a monopoly with 80% of market share, the Chinese regulators are unhappy about it and there are reports that the deal will not happen.
🎮 DouYu is known as the Twitch of China. The Chinese gaming market is the largest in the world and growing at about 35% per year. In the US and the rest of the world, one can livestream on YouTube $GOOG or Twitch $AMZN but these are banned in China. The market there is dominated by DouYu, Huya and Tencent and together they have 80% of market share. DOYU increased their revenues by 10X in 4 years.
💰 Even if the deal fails, at current price, DouYu is a bargain. It is not much smaller than Huya but has half the market cap. For the time being, I'm waiting to see if I can buy more at cheaper prices.
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