On August 1, a rare public dispute unfolded in the short-drama overseas market when listed company Col Global Co., Ltd. and its investee, Crazy Maple Studio, released competing statements via their respective WeChat public accounts over the validity of a "Settlement and Governance Agreement." This open confrontation traces back to May 29, when Crazy Maple Studio filed a lawsuit against Col Global Co., Ltd. in the Superior Court of Los Angeles County, California.
From capital incubation to a transfer of control, and from joint market exploration to litigation, the dispute has fully exposed the deep-seated conflict between Col Global Co., Ltd.'s dual-track strategy of "equity investment plus self-operated business" in the overseas short-drama sector.
The seed of discord was sown through a transfer of control. The relationship between Crazy Maple Studio and Col Global Co., Ltd. dates back to 2016, when Crazy Maple Studio's predecessor, CHINESEALL CORPORATION, was a wholly-owned subsidiary of Col Global Co., Ltd. In 2018, Col Global Co., Ltd. sold 49% of the company's shares, and it was renamed Crazy Maple Studio. After several rounds of equity changes, Col Global Co., Ltd.'s stake fell to 49.16%, keeping it as the largest shareholder, while Chapter LLC, controlled by Crazy Maple Studio's management, held 38.91% as the second-largest shareholder.
The real turning point came in April 2023. Col Global Co., Ltd. announced that, to encourage Crazy Maple Studio's independent operation and market-driven financing, it agreed to reshuffle the studio's board of directors, handing operational control to the management team. Specifically, Col Global Co., Ltd. reduced its voting rights in Crazy Maple Studio from 50.90% to 47.81%, while Chapter LLC's voting rights rose to 51%. Of the seven board seats, management could nominate four, and Col Global Co., Ltd. could nominate three. Crazy Maple Studio was no longer consolidated into Col Global Co., Ltd.'s financial statements, which instead used the equity method for accounting. At the time, Col Global Co., Ltd. explained that the management team's strong recent performance warranted giving the core team a controlling stake to maximize their motivation. Later that year, Crazy Maple Studio's marketing director, Kong Yan, told media that Col Global Co., Ltd. was an early investor and remains a major financial investor, not a controlling shareholder, and does not participate in daily decisions.
However, the transfer of control did not lead to a clean separation of businesses. In its lawsuit, Crazy Maple Studio stated, "Our company pioneered and validated the overseas vertical-screen paid short-drama track. Later, Col Global Co., Ltd. launched several self-operated overseas short-drama apps in phases, with positioning, target audiences, and paid monetization logic highly overlapping with our short-drama business." This statement reveals the core of the conflict: Crazy Maple Studio alleges that Col Global Co., Ltd. is competing with it through its self-operated business. According to the Superior Court of Los Angeles County, Crazy Maple Studio filed a lawsuit against COL Group Co., Ltd. (the English name of Col Global Co., Ltd.) on May 29, 2026, under the case type "Declaratory Relief Only," seeking to confirm the rights and obligations of both parties without compulsory enforcement.
The focus of the dispute is a "Settlement and Governance Agreement." Crazy Maple Studio claims that the agreement's terms are "extremely unbalanced," unilaterally limiting the studio's board governance rights, reducing avenues for accountability, adding no reciprocal constraints on directors appointed by Col Global Co., Ltd., and significantly narrowing the scope of damages the studio can claim. Based on this, Crazy Maple Studio requests the court to declare the agreement legally void. In its statement on the evening of August 1, Col Global Co., Ltd. responded that the agreement was "a genuine expression of intent made under the legal framework of equality, voluntariness, and full consultation, with full legal binding force." The company stated it has "strictly fulfilled contractual obligations and shareholder duties throughout the investment and cooperation process" and argued that commercial disputes should be resolved by the court based on objective facts and legal rules. The two statements—one from Crazy Maple Studio on the morning of August 1 and one from Col Global Co., Ltd. that evening—created a direct information clash between the two market entities.
The conflict's industrial backdrop is the explosive growth of the overseas short-drama track and structural contradictions in profit distribution. Crazy Maple Studio's ReelShort is the pioneer of overseas vertical-screen paid short dramas, going viral after its launch in August 2022. Financial data shows that in 2023, Crazy Maple Studio achieved revenue of 686 million yuan but net profit of only 244,300 yuan; in 2024, revenue soared to 2.91 billion yuan, up 324.09% year-on-year, with net profit rising to 7.9117 million yuan; in 2025, revenue further jumped to 5.721 billion yuan, but net profit turned sharply negative, dropping to -85.8378 million yuan—a classic case of "bleeding growth." Over three years, revenue increased more than sevenfold, but profits have consistently hovered near breakeven, and now the company has fallen into a loss. This financial trajectory highlights the core contradiction of the overseas short-drama track: the cost of acquiring users in overseas markets is expanding much faster than revenue growth, high-growth revenue has not yet been converted into a sustainable profit model, and massive marketing spending has already eroded profit margins.
According to DataEye-ADX data, ReelShort deployed 137,000 ad creatives in the first half of the year (up 661% year-on-year, 1.5 times the total for the full year of 2024), ranking 7th in the overseas short-drama app ad creative rankings for the first half of 2025. In the second quarter, ReelShort further intensified its ad spending, with an average of over 5,000 ad creatives per day, peaking at over 8,000 on a single day. This increased spending is likely the main reason for Crazy Maple Studio's temporary losses. The overseas short-drama market is becoming increasingly competitive, with all players rushing to "capture territory" and gain market share. The high-intensity ad spending inevitably impacts short-term profitability. On the other end of spending, rising user acquisition costs continue—the average cost per install for mobile apps in the North American market has risen to $5.28, more than ten times the cost in Latin America. The same money buys fewer users. Meanwhile, on the supply side, the number of overseas short-drama platforms has expanded from 100 to 400 in a year, with the industry deploying over 1.8 million ad creatives in the year, more than 10 times the year-ago period. The entry of free-model platforms like Melolo (ByteDance) has further compressed pricing space for paid platforms. The cake's growth rate is slowing, the number of people dividing it has tripled, and ad costs are rising. A significant portion of Crazy Maple Studio's 5.7 billion yuan in revenue was essentially bought from ad platforms with real money.
The parent company's financial statements confirm this. In 2025, Col Global Co., Ltd.'s selling expenses reached 953 million yuan, up 105% year-on-year, accounting for 57.51% of annual revenue. The company explained in its earnings report that this was due to increased overseas short-drama business promotion costs. This aligns with the industry adage: short-drama companies are effectively working for traffic platforms. Beyond costs, the content itself is hitting a ceiling. In July 2025, Dianzhong Technology and Tinghua Island both issued statements accusing ReelShort of "highly imitating" their original works without authorization. Both are leading players in the domestic short-drama industry, with Tinghua Island stating it sends multiple lawyer letters each month, but cross-border enforcement has had limited effect. The platform once seen as a model for "Chinese short dramas going overseas" has become a target of public criticism from peers.
Col Global Co., Ltd. is also mired in losses. In 2025, the company achieved revenue of 1.657 billion yuan, up 42.92% year-on-year, but its net loss attributable to shareholders was 671 million yuan, expanding 176.24% from the previous year. Its non-GAAP net loss was 637 million yuan, and operating cash flow was negative 204 million yuan. The company's self-developed short-drama platform, FlareFlow, generated 352 million yuan in revenue but posted a net loss of 473 million yuan—for every 1 yuan earned, it lost 1.34 yuan. Entering 2026, the overseas short-drama market faces two major changes: TikTok's official entry and the influx of comic-drama formats, making the competitive landscape more complex and intense. In the first quarter, Col Global Co., Ltd. reported revenue of 310 million yuan, up 33.12% year-on-year, but selling expenses grew even faster, rising 9 percentage points, and the net loss was still 45.8287 million yuan, narrowing about 47.88% year-on-year but still far from profitability.
A listed company, whose investee ReelShort supports its valuation narrative in the overseas short-drama space, continues to suffer losses. Meanwhile, the investee that provides the narrative believes its majority shareholder is directly competing with it through self-operated businesses and has signed an "unbalanced" agreement. This misalignment of interest structures is the structural driver pushing the two parties toward litigation. If the lawsuit goes unfavorably, it could affect Col Global Co., Ltd.'s revenue recognition and strategic coordination with ReelShort. The case is still pending, with no judicial conclusions yet. Col Global Co., Ltd. emphasized in its statement that the lawsuit is "merely a common commercial disagreement" and will not have a material adverse impact on its daily operations, financial condition, or long-term development. However, the market needs to more carefully assess the long-term impact of this dispute. Col Global Co., Ltd. gradually pushed Crazy Maple Studio from a wholly-owned subsidiary to independent operation, only to enter the same track with its own self-operated business. Crazy Maple Studio achieved commercial success after Col Global Co., Ltd. relinquished control, but now it is taking its largest shareholder to court. For the capital market, the real question extends beyond the agreement: when the core assets of the investee—ReelShort's platform value and operational team—are in legal confrontation with the listed company, can the valuation narrative of Col Global Co., Ltd. as the "first stock of short dramas going overseas" maintain its original persuasiveness? The answer may only become clear when the verdict is reached.
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