Youku (YOKU -5.1%) is down 11% over the last two days. Though a broad selloff in tech momentum stocks is clearly a factor, concerns about slumping drama video views also seem to be taking a toll.
T.H. Capital thinks Youku's average daily video views for newly-added hit TV dramas may have fallen to just 25M in Q1, after totaling 56M in Q4. Meanwhile, the firm thinks average daily views for Youku's in-house professional content may have only grown to 41.3M from 35.4M.
Youku has been spending aggressively to acquire rights to popular Chinese TV dramas and other professional content, as it continues battling with Baidu, Tencent, and Sohu's online video platforms. Content spend equaled 37% of revenue in Q4, down slightly from Q3's 39%.