author: Bart Swiatek
Opera Software in Trouble; The Company is Barely Staying Afloat [Updated]
Opera Software, the company best known for developing the popular web browser, is in serious trouble. The problems are caused by the actions of the company's president, Yahui Zhou, dubious practices related to loan applications and Opera's shrinking shares on the browser market.
Update
Opera Software officially denied the information from the Hindenburg Research report. According to the company's representatives, it was an attempt to manipulate the company's share prices.
"The Company is aware of and has carefully reviewed the report published by the short seller on January 16, 2020. The Company believes that the report contains numerous errors, unsubstantiated statements, and misleading conclusions and interpretations regarding the business of and events relating to the Company.
The Company has recently launched and scaled multiple new businesses and has continued to post strong financial results, and intends to continue leveraging its well-known brand and large user base of more than 350 million users for additional growth. The Company also remains committed to maintaining high standards of corporate governance and constantly evolving our products, practices, and governance."
Original message
<Analysts from Hindenburg Research have prepared a report on the Opera Software corporation, known primarily for developing the popular Opera browser. According to the document, since mid-2018, the company's market share in the browser market has shrunk by more than 30%, which is one of the causes of the company's financial problems (in 2019, a loss of USD 12 million was recorded, compared to 32 million profit a year earlier). But this is just the beginning of bad news.
The vast majority (42%) of money earned by Opera Software is currently generated by applications giving access to the so-called "paydays", i.e. short-term loans under draconian terms offered without any major formalities. Programmes such as OKash, OPesa (both available in Kenya), CashBean (India) or OPay (Nigeria) are mentioned. The point is that the terms and conditions of these services are contrary to Google's principles. Although the information on Google Play suggests that the programs allow you to take out a loan for 61-365 days, in reality, according to the content of e-mails sent to users, the deadlines are much shorter (15-29 days). Google has recently required it to be at least 60 days (interestingly, Opera has not informed its investors about the change of rules). When the company from Mountain View realizes this abuse, the apps will most likely disappear from the platform (one of them is said to have already been removed)... and with them the rest of Opera Software's remaining revenues.
The situation is not improved by the very questionable behavior of President Yahui Zhou, who took control of Opera Software in 2018 after it was bought out by the Chinese IPO group (Zhou is the biggest shareholder in the group). The aforementioned investor, who has faced, among other things, accusations of fraud (related to another loan business, which used to be registered in the USA), has transferred more than $40 million out of the company. He pumped the vast majority of this money into advertising campaigns for products developed as part of other businesses (including StarMaker karaoke applications). 9.5 million bucks disappeared in mysterious circumstances - in connection with the transaction in which the head of Opera bought... something that already belonged to him (although official company documents suggested otherwise).
Analysts expect that due to the deteriorating financial condition, Opera Software may soon cease to exist. This will happen more quickly if President Yahui Zhou continues to treat the company as his personal ATM - or if Google takes action for violations of regulations by the company's loan applications.
It is worth noting that this is not the only company associated with the browser market that is in a bad shape - a few days ago the Mozilla Foundation (responsible for the well-known Firefox program) was forced to lay off 70 employees.