Wednesday May 20,2015 : 500.COM FEELS THE PAIN OF CHINESE ONLINE LOTTERY CRACKDOWN
CEO and founder steps down, but will remain as chairman.
The Hong Kong-based Chinese online lottery operator 500.com felt the pain of the Chinese government's suspension of online ticket sales activity in its last quarter, but enjoyed increases in sales and revenue.
Despite this, the company posted a net loss of RMB 52 million in its Q1-2015, blaming share-based compensation expenses and a RMB 30 billion bad debt provision, along with rising marketing and services expenses.
Q1 sales were up 23.8 percent year-on-year to RMB 1.3 billion, yielding revenues up 10 percent at RMB 98.8 million.
The impact of the Chinese suspension order was evident in a quarter-on-quarter comparison with Q4-2014 which shows that sales declined 25.7 percent and revenue 32.4 percent. Management noted that, if maintained, the suspension will result in further adverse numbers in Q2 as sales have dried up.
CEO and founder Man San Law took the opportunity to reveal that he is to relinquish his role as CEO, although he will retain his responsibilities as chairman of the company; he will be replaced as CEO by current company president Zhengming Pan, who joins the board of directors.
After a 9 percent decline in the share price Monday, 500.com stock suddenly ignited, soaring 30 percent to almost $22 a share as investors bought into the company…whether that signals optimism or knowledge of an end to the suspension of sales is anyone's guess at present.