Why JOYY Stock Bounced Back Today
Shares of JOYY (NASDAQ: YY) have bounced back today, up by 16% as of 12 p.m. EST, after the company defended itself against fraud allegations made by short seller Muddy Waters. The stock plunged by 26% yesterday after the prominent bear released a lengthy 71-page report accusing the company of misrepresenting transactions and user engagement.
Muddy Waters alleged that JOYY uses internal and external networks of bots to create gift transactions that represent an estimated half of gift volume on YY Live, the company's live-streaming platform that Baidu (NASDAQ: BIDU) just agreed to purchase for $3.6 billion. The short seller argued that YY Live's user metrics are inflated and that revenue is fraudulent. Muddy Waters also questioned JOYY's reported cash position.
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Source Fool.com
