JOYY Announces Latest Development in Sale of YY Live

Rhea-AI Summary

JOYY Inc. (NASDAQ: YY) received a notice from Baidu, Inc. terminating the Share Purchase Agreement for the acquisition of JOYY’s domestic video-based entertainment live streaming business, YY Live. The Company is seeking legal advice and considering its options in response to the Notice.

Insights

Financial Analyst

The termination of the Share Purchase Agreement by Baidu represents a significant development for JOYY Inc. and its investors. The initial acquisition agreement, which involved Baidu acquiring JOYY's YY Live platform, was a strategic move to consolidate Baidu's position in the video-based entertainment live streaming sector. The reversal of this transaction could imply a substantial shift in the expected revenue streams and strategic direction for JOYY. This might lead to a reassessment of the company's valuation by market participants.

Given that the sale was 'substantially completed', the termination notice could result in legal disputes or financial settlements, which may have material financial implications. Investors should monitor the situation closely for potential impacts on the company's financial health, including any contingent liabilities that may arise. The uncertainty surrounding the outcome could introduce volatility in the company's stock price in the short-term.

Legal Expert

The legal ramifications of Baidu's decision to terminate the Share Purchase Agreement with JOYY are complex. The fact that the sale was substantially completed but not fully finalized introduces potential grounds for litigation. JOYY's assertion that it reserves all rights suggests that it may pursue legal action to either enforce the original agreement or seek damages for what it perceives as wrongful termination.

Investors should be aware that such legal proceedings can be protracted and costly, with an uncertain outcome. The resolution of this dispute will likely hinge on the specific terms of the agreement and the reasons cited by Baidu for the termination. The legal process may also bring to light any material facts or risks that were not previously disclosed, which could affect investor perception and the market value of both companies.

Market Research Analyst

The potential cancellation of the acquisition deal could have broader implications for the live streaming industry. JOYY's YY Live was poised to bolster Baidu's competitive position in this sector and its reintegration into JOYY may alter the competitive landscape. The deal's termination might signal a shift in Baidu's strategic priorities or a reassessment of the value or synergy expected from the acquisition.

For the industry, this development could signify a change in consolidation trends and may affect the strategies of other market players. Stakeholders should consider the implications for market dynamics, potential repositioning by competitors and the impact on JOYY's future partnerships and growth opportunities.

SINGAPORE, Jan. 01, 2024 (GLOBE NEWSWIRE) -- JOYY Inc. (NASDAQ: YY) (“JOYY” or the “Company,” formerly known as YY Inc.), a global technology company, announced that the Company received a written notice (the “Notice”) from an affiliate of Baidu, Inc. (“Baidu”) today purporting to terminate the Share Purchase Agreement, dated November 16, 2020 (as subsequently amended or supplemented, the “Share Purchase Agreement”), pursuant to which Baidu would acquire JOYY’s domestic video-based entertainment live streaming business (“YY Live”). While the sale of YY Live to Baidu was substantially completed on February 8, 2021, with certain matters remaining to be completed in the future, Baidu asserted in the Notice that it has and exercised the right to terminate the Share Purchase Agreement and effectively cancel the transaction. The Company is seeking legal advice and will consider all options at its disposal in response to the Notice. The Company expressly reserves all rights.

About JOYY Inc.

JOYY is a leading global technology company with a mission to enrich lives through technology. JOYY currently operates several social products, including Bigo Live for live streaming, Likee for short-form videos, Hago for multiplayer social networking, an instant messaging product, and others. The Company has created a highly engaging and vibrant user community for users across the globe. JOYY’s ADSs have been listed on the NASDAQ since November 2012.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this press release, as well as JOYY’s strategic and operational plans, contain forward-looking statements. JOYY may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about JOYY’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: JOYY’s goals and strategies; JOYY’s future business development, results of operations and financial condition; the expected growth of the global online communication social platform market; the expectation regarding the rate at which to gain active users, especially paying users; JOYY’s ability to monetize the user base; fluctuations in global economic and business conditions; the impact of the COVID-19 to JOYY’s business operations and the global economy; and assumptions underlying or related to any of the foregoing. A more detailed and full discussion of those risks and other potential risks is included in JOYY’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and JOYY does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

JOYY Inc.
Jane Xie/Maggie Yan
Email: joyy-ir@joyy.com

ICR, Inc.
Robin Yang
Email: joyy@icrinc.com

FAQ

What is the name of the global technology company mentioned in the PR and its ticker symbol?

The global technology company mentioned in the press release is JOYY Inc. and its ticker symbol is NASDAQ: YY.

What was the Share Purchase Agreement for and who was the intended acquirer?

The Share Purchase Agreement was for the acquisition of JOYY’s domestic video-based entertainment live streaming business, YY Live, and the intended acquirer was Baidu, Inc.

When was the sale of YY Live to Baidu substantially completed?

The sale of YY Live to Baidu was substantially completed on February 8, 2021.

What action did Baidu take regarding the Share Purchase Agreement?

Baidu asserted in the Notice that it has and exercised the right to terminate the Share Purchase Agreement and effectively cancel the transaction.

What is the Company doing in response to the Notice from Baidu?

The Company is seeking legal advice and will consider all options at its disposal in response to the Notice.