JOYY Refutes Muddy Waters’ Report

Rhea-AI Summary

JOYY Inc. (Nasdaq: YY) responded to accusations from Muddy Waters regarding its financial accuracy. The company claims the report is filled with errors and misunderstandings about the live streaming sector in China. JOYY asserts its solid cash flow and has a US$300 million dividend policy, with US$25 million already distributed in 2020. Its acquisition of BIGO has resulted in significant revenue growth, with BIGO’s revenue rising from US$181 million in Q2 2019 to US$490 million in Q3 2020. JOYY remains committed to its share repurchase program, demonstrating confidence in its future prospects.

Positive

• Strong cash balance and consistent cash flow generation.
• US$300 million share repurchase program reflects confidence in future growth.
• Acquisition of BIGO has led to substantial revenue growth.

Negative

• None.

GUANGZHOU, China, Nov. 19, 2020 (GLOBE NEWSWIRE) -- JOYY Inc. (Nasdaq: YY) (“JOYY” or the “Company”), a global video-based social media platform, today issued the following statement in response to allegations made in a report by Muddy Waters.

Yesterday, Muddy Waters issued a short seller report on JOYY, causing anxiety and market disturbance, leading to abnormal share price movements. The Company believes that the report contains numerous errors, unsubstantiated statements, and misleading conclusions and interpretations regarding information relating to the Company.

Muddy Waters’ report shows its lack of a basic understanding of the live streaming industry in China. The operating metrics disclosed by JOYY are commonly used and publicized by its industry peers. Live streaming has become a key revenue engine for companies in the internet sector, including a number of public companies listed in the U.S. and Hong Kong.

JOYY has solid cash balance and has consistently generated strong cash flow. To conclusively refute the report’s false allegation regarding the authenticity of JOYY’s profit figures, the Company is open to cash verification and diligence to be conducted by competent third-party advisers. The Company’s dividend policy of US$300 million announced in August 2020, with US$25 million already paid out in the third quarter of 2020, is also testament to the Company’s confidence in its operating cash flow.

JOYY’s acquisition of BIGO strictly followed the necessary corporate governance procedures and obtained all requisite approvals. In the 20 months since the acquisition, BIGO witnessed rapid revenue growth, with its top-line increasing from US$181 million in the second quarter of 2019 to US$490 million in the third quarter of 2020. Bigo Live ranked as the sixth highest grossing non-game mobile app in the world in September 2020, according to App Annie.

To demonstrate the Company’s confidence in its long-term prospects, JOYY will continue to execute on its US$300 million share repurchase program.

About JOYY Inc.
JOYY Inc. is a global social media platform. The Company’s highly engaged users contribute to a vibrant social community by creating, sharing, and enjoying a vast range of entertainment content and activities. JOYY enables users to interact with each other in real time through online live media and offers users a uniquely engaging and immersive entertainment experience. JOYY owns BIGO, a fast-growing global tech company headquartered in Singapore. BIGO owns several popular video based social platforms including Bigo live, a leading global live streaming platform outside China; Likee, a leading global short-form video social platform; and video communication service and others. JOYY has created an online community for global video and live streaming users. JOYY Inc. was listed on the NASDAQ in November 2012.

Safe Harbor Statement
This announcement 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. 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 fourth 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. Further information regarding these and other risks is included in JOYY’s filings with the SEC. All information provided in this press releas

FAQ

What did Muddy Waters allege about JOYY Inc. on November 19, 2020?

Muddy Waters issued a report alleging inaccuracies in JOYY's financial statements, causing market disturbance.

How did JOYY Inc. respond to allegations made by Muddy Waters?

JOYY refuted the claims, stating the report contains errors and misunderstandings about the live streaming industry.

What is JOYY's cash policy as of November 2020?

JOYY announced a US$300 million dividend policy, with US$25 million already paid out in Q3 2020.

What revenue growth has BIGO experienced since JOYY's acquisition?

BIGO's revenue increased from US$181 million in Q2 2019 to US$490 million in Q3 2020 after the acquisition.

What does JOYY's share repurchase program signify?

The US$300 million share repurchase program indicates JOYY's confidence in its long-term financial stability.