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Mar 11, 2019 / 11:43

Vietnam’s Yeah1 to offload US-based ScaleLab after two months of acquisition

Hai Yen

By offloading ScaleLab, Yeah1 is losing an opportunity to expand its presence in the global market, as ScaleLab’s full roster of 1,750 influencers encompasses over 400 million YouTube subscribers, and garners 3 billion views per month.

Vietnam’s leading media group Yeah1 has announced the plan to sell 100% stake in US-based ScaleLab after having acquired the latter in a deal worth US$20 million two months ago, said the group in a statement on its website. 
 
Illustrative photo.
Illustrative photo.
According to Yeah1, the divestment in the US company is aimed to protect investment capital and maximize investors’ interest, following YouTube’s announcement that it would terminate all Content Hosting Services Agreements (CHSA) after March 31 with all Yeah1’s subsidiaries or investment companies with business activities related to YouTube AdSense. 

By offloading ScaleLab, it would help the company from being affected by the Yeah1’s incident with YouTube, stated Yeah1. 

Nevertheless, Yeah1 is losing an opportunity to expand its presence in the global market, as ScaleLab’s full roster of 1,750 influencers encompasses over 400 million YouTube subscribers, and garners 3 billion YouTube views per month. 

Early in March, YouTube claimed SpringMe Pte, a Thailand-based company, which is indirectly owned by Yeah1 with nearly 17%, had violated its policies regarding YouTube AdSense, the program that allows publishers on the video channel to place advertisements by third parties, in turn generating revenue for the content provider.

As of present, the Yeah1 Group management said it is actively cooperating with YouTube regarding the incident, which has caused shares of the group to plunge for six consecutive trading sessions through this morning, standing at VND158,700 (US$6.85) on March 11, down 42% from VND245,000 (US$10.45) when the incident occurred on March 1. 

This resulted in a sharp decline in the company’s market capitalization, going down from VND7.6 trillion (US$324.31 million) to VND5.2 trillion (US$224.5 million), a loss of VND2.4 trillion (US$103.61 million).

Ho Chi Minh Securities Company (HSC) in its latest report suggested that in the worst scenario that Yeah1 fails to reach a compromise with YouTube, Yeah1 Network, Scale Labe and SpringMe would no longer be multichannel network partners of YouTube. 

Yeah1’s recent announcement of divesting in ScaleLab may signal an unfavorable result of the negotiation process. 

HSC also forecast revenue of Yeah1 in 2019 at VND1.80 trillion (US$77.71 million), down 64% compared to its previous estimation of VND2.83 trillion (US$122.18 million). 

Consequently, the group’s pre-tax profit is expected to decrease by 83.3% to over VND26 billion (US$1.12 million). 

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