YY Inc. and many other Chinese internet-based firms are finding it harder to source significant stock investments. This is because of the government’s current cooling down strategy.
Its CEO David Li must have money he cannot wait to spend. He has offered to buy the video-based social network for $3.7 billion.
Who is this man, what is so magnetically attractive about the YY Inc. brand, and why now?
YY Inc. CEO the “Steve Jobs” of China
Opinion maker Forbes magazine places the man most seen in black jeans and t-shirt, 87th on its 2015 billionaires list, and 8th richest in China last year. His self-made wealth comes from smartphones, having co-founded Xiaomi in 2010 to undercut the competition. The serial entrepreneur also chairs gaming company Kingsoft when not spending quality time with his wife and two children. Academically, he holds a Bachelor of Science in Engineering from Wuhan University. So another Chinese wonder kid, but what’s the point about YY Inc.?
The Attraction: A Chinese Social Media Site on NYSE
YY Inc. listed on the New York Stock Exchange in 2012, meaning it legitimately bypasses the China stock-trading clampdown. If David Li gets it right once he is fully at the helm, he could be about to climb the Forbes ladder by more than a few rungs. The video-based social network has many attractions. Chief among these are 300 million users (what an advertising base!) and a virtual currency they earn by participating in karaoke or posting video tutorials on their subject of choice.
Users can convert the YY Inc. currency to cash, with high flyers said to be pulling $20,000 a month. In the lower echelons, customers watch videos about concerts, sports, and fashion, and exchange virtual roses with their friends. It will be interesting to see where CEO David Li takes YY Inc. next, how successful he is, and in what direction.