DouYu International Holdings Ltd (NASDAQ:DOYU) Stock Attempts To Bounce Back: What Next?

Chinese streaming company DouYu International Holdings Ltd (NASDAQ:DOYU) came into focus among many investors yesterday and its stock seemed to have gone into recovery mode after having slumped recently.

Yesterday, the stock may have jumped by 9% but at the same time investors ought to keep in mind that over the course of the past month, the DouYu International Holdings stock has actually gone down by as much as 45%. The slump in the stock was related to the cancellation of the $5.3 billion merger deal with Huya Inc. The cancellation of the merger was not actually related to any disagreement between the two companies but the new regulatory policies in China.

Just a couple of days prior to the cancellation of the merger by DouYu International Holdings, Chinese tech giant Tencent Holdings Ltd had been barred from merging the two biggest video game streaming platforms in the country by the regulatory authorities.

State Administration of Market Regulation (SAMR), the Chinese regulator, noted that the deal was going to be blocked on the basis of anti-trust issues. Hence, it was perhaps not a big surprise that DouYu International Holdings decided to nix its multi-billion dollar merger.

Market Reaction:

On Wednesday, DOYU stock jumped 9% at $4.11 with more than 7.91 million shares, compared to its average volume of 4.74 million shares. The stock has moved within a range of $3.8700 – 4.1880 after opening the trade at $3.90. Over the past 52-week, the stock has been trading within a range of $3.6900 – 20.5400.