Snow Lake Capital’s founder ups stake by $100m in Joyy post Muddy Waters report

Last week, due diligence-based investment firm Muddy Waters called Chinese livestreaming startup Joyy a “fraud tech company” and claimed that its livestreaming service YY Live is “around 90% fraudulent.” YY is “guilty of bot farming, creating fake transactions, and having fake users,” Muddy Waters said in a 71-page report.

According to Ma, Muddy Waters’ reports have been “very poor” in the past few years. He also claimed that he has increased his stake by US$100 million in Joyy following the rumor and will continue to buy more shares if its stock drops further.

Snow Lake Capital is a hedge fund firm behind the video-based social media platform.

“Good companies will stand the test of the market,” Ma said referring to the other companies that Muddy Waters also targeted in previous reports, namely Anta Sports, TAL Education Group, and iQiyi. When Muddy Waters accused iQiyi of fraud earlier this year, Snow Lake Capital also increased its stake in the firm.

The Muddy Waters report came shortly after China’s search engine giant Baidu agreed to buy YY Live in a US$3.6 billion deal – a “strategic deal” from the perspective of an investor, Ma called it.

Recently, class action lawsuits were filed against Joyy after the company’s stock fell amid the controversy with Muddy Waters.