Ku6 Closes Shanghai Office, as its NASDAQ Shares Dip Below $1

It has never been a smooth ride for Ku6.com (NASDAQ:KUTV), which is currently China’s fifth-largest video-streaming and sharing site. And now, as its stock sinks to below US$1 per share, some staff are facing job losses, which are being portrayed in some sections of the Chinese media as “violent cuts” to its staff and operations.

Ku6 – which was acquired by Shanda Interactive (NASDAQ:SNDA) in 2009, but has proven problematic and unprofitable for Shanda – insists it’s just restructuring. The company says that its games and music video channels, which were based in Shanghai, will be moved to Beijing HQ along with staff who wish to relocate. The Shanghai office will close. Some staff are, however, being let go – with Ku6 stating that they’re voluntary redundancies – but no figures have been given. Ku6’s investor relations website says that it has 610 employees in total.

Despite being one of China’s first video sites at the turn of the last decade, Ku6 was soon superseded by Youku (NYSE:YOKU), Tudou (NASDAQ:TUDO), and Baidu’s (NASDAQ:BIDU) Qiyi.com, in terms of market share in this sector.

As a result, it has also struggled to keep pace with the maturing video market in China in which Chinese consumers have been demanding increasingly costly licensed TV shows – the rights to which can now cost as much as US$100,000 per episode.

Ku6 listed on NASDAQ in 2005. Its net loss in Q3 2011 was $13 million, about on a level with its losses at the same period in 2010. Its stock is currently at its lowest ebb, closing before the weekend at 98 cents per share.

[Source: DoNews – article in Chinese]