Video Giant Joyy Dives After Muddy Waters Labels It a Fraud
- Stock posts biggest-ever decline on Muddy Waters’s report
- Baidu agreed to buy Joyy’s YY business for $3.6 billion
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Joyy Inc.’s shares tumbled the most ever after short-seller Muddy Waters called it a “fraud tech company,” casting doubt over a pioneer of Chinese livestreaming that’s selling its local video business to Baidu Inc.
Muddy Waters Research founder Carson Block said Joyy’s livestreaming service YY is “guilty of bot forming, creating fake transactions and having fake users.” The report, published Wednesday, came days after Baidu agreed to buy YY for $3.6 billion. Baidu representatives had no immediate comment. Joyy fired back on Thursday, saying the report was replete with errors and demonstrated a lack of understanding of the industry.