Shares of Chinese mobile content platform Qutoutiao dropped 17 percent in pre-trading to $3.07 on Thursday, after China’s annual consumer rights show showed it allowed ads promoting exaggerated, impossible claims of weight-loss products.
One of the ads on the site claimed to offer free body-shaping products worth 100,000 yuan ($14,300) that will help people lose 15 kilograms a month and never gain it back.
Qutoutiao made an apology immediately after the show, saying it is now fully aware of its weakness in managing advertisements on the platform and offered a sincere apology to users.
“We immediately established a special team to carry out comprehensive screening of relevant advertisements. We will uncover and ban the problems once they are found,” Shanghai Jifen Culture Communications Co, the developer of Qutoutiao said.
Qutoutiao released its financial results for the first quarter of 2020 in June. It showed that the company’s revenue grew 26.2 percent year-on-year to 1.4 billion yuan. The number of combined average monthly active users climbed to 138 million, up 24.2 percent.
File photo:CGTN
