Qutoutiao Sends Shares Down 9% on Soaring Losses
The stock in Qutoutiao inc. (Nasdaq: QTT) fell more than 9 percent Thursday, to $4.10 per share, after the company reported its net loss has more than doubled in the second quarter.
The mobile content aggregator, based in Shanghai, said in a statement Wednesday after markets closed that its revenue in the three months through June reached $201.9 million, up 188 percent year-over-year. Net loss soared to $81.8 million from $31.1 million a year ago, it said.
Advertising and marketing revenues factored into Qutoutiao’s revenue gain. The company reported that revenue from that sector grew to $197.8 million, up 209 percent year-over-year.
Eric Tan, Qutoutiao’s chairman and chief executive officer, noted the growth of its Midu service, launched in May 2018, which provides free literature online.
“Midu started in a competitive online literature market where strong and dominant players already existed. Pioneering the free-to-read model, Midu expanded the addressable market by offering a solution to hundreds of millions of online literature lovers who had been previously excluded by the traditional paid-only business models,” Tan said in a conference call on Wednesday.
Tan added, “Midu has maintained a leading position in the free-to-read market since inception and already has the rigid content ecosystem by a clear margin in comparison to direct peers”
Qutoutiao said the number of its average monthly active users (MAUs) reached 119.3 million in the second quarter, up 250 percent year-over-year. Average daily active users (DAUs) reached 38.7 million, up 208 percent a year ago. According to Crunchbase, Qutoutiao is the second-largest news app in China.
Recently, Shanghai Jifen Culture Communications Co. Ltd., one of Qutoutiao’s consolidated entities, was granted an internet news license by the Cyberspace Administration of China.
Looking ahead, Qutoutiao said that – based on the current marketing conditions – it anticipates that it will maintain similar results in the third quarter.
Qutoutiao completed its initial public offering in New York a year ago, raising $84 million for its ADSs priced at $7 apiece.