Joyy’s stock sees largest gain in 3 years after challenging Muddy Waters’ report

The Muddy Waters report, which was published on November 18, called Joyy a “fraud tech company,” which the Chinese firm now claims contains false statements. Joyy’s shares have since jumped 17%.

Joyy, the parent firm of China-focused livestreaming service YY Live, also pointed to the US$300 million dividend program it announced in August as proof of its ability to generate real cash and distribute it to shareholders. This includes the US$25 million it paid out during the third quarter.

“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 said in a statement.

In response, Muddy Waters put out a statement further explaining its allegations. It also included an explainer on how to review its research.

In the company’s 71-page report on Joyy, Muddy Waters said the livestreaming firm is “guilty of bot farming, creating fake transactions, and having fake users.” The report comes after Chinese search engine Baidu announced that it agreed to acquire YY Live from Joyy in a US$3.6 billion deal.