In 2019, we conducted a fairly detailed analysis of QuTouTiao, believing that although it went public prematurely and its business was in a rapid growth phase, it still faced:
Firstly, can the subsidies to users be sustained in the long term? If a company starts pursuing profitability and reduces marketing expenses, can user growth maintain its momentum? For a long time, "burning money to subsidize users" has been a sensitive topic in the internet industry, especially after the Luckin Coffee incident.
Secondly, although the subsidy behavior temporarily impacts the profit and loss statement, users, out of trust in the platform, do not withdraw the subsidies promptly. Thus, while subsidies result in losses, they do not affect cash flow performance. Therefore, if users lose confidence in the platform and accelerate withdrawals, could there be a risk of a "run on the bank"?
In the past year, our judgment and analysis of Qu Toutiao mainly revolved around the above.