CooTek Lowers Q2 Guidance After Dispute With Google; Stock Tanks
Shares in CooTek tumbled 16 percent Monday after the app developer said it is facing difficulties related to the ban of its apps by Google Play Store.
CooTek (Cayman) Inc. (NYSE: CTK) was one of the biggest losers among Chinese ADSs on Wall Street Monday, its stock tanking 16 percent to $6.97 per share after the company lowered its guidance for the second quarter and said it anticipates difficulties related to the ban by Google Play.
CooTek said in a statement today that it expects to report revenue in the range of $34 million to $36 million for the second quarter. The guidance is a significant decline from its previous target of between $45 million and $50 million.
CooTek added that the drop in revenue was a result of the difficulties it had collecting corresponding advertising revenues from Google. The American giant has temporarily disabled the company's global portfolio apps, alleging that hundreds of CooTek apps used an invasive adware plugin.
While CooTek said it remains in continuing talks with Google to regain its global portfolio apps, the company said it could face difficulties in sustaining its user base.
The mobile internet company, based in Shanghai, develops apps focusing on five verticals: fitness, news, short videos, healthcare, lifestyle and entertainment.
CooTek is set to announce its second-quarter earnings on Aug. 20. In the first quarter, the company generated $40 million in revenue.