JOYY investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, JOYY, through its subsidiaries, operates a social media platform in the People’s Republic of China and internationally. JOYY describes itself as operating live streaming platforms, including YY Live, an interactive and comprehensive live streaming social media platform offering music and dance shows, talk shows, outdoor activities, and sports and anime; Bigo Live, which enables users to live stream their specific moments and talk live with each other; and Huya, a game live streaming platform. JOYY also operates a short-form video platform, such as Likee, that produces, uploads, views, shares, and comments on short-form videos on a daily basis. JOYY was originally known as YY Inc., and changed its name to JOYY Inc. on December 20, 2019.
The Class Period commences on April 28, 2016, when JOYY, then called YY Inc., filed with the SEC its Annual Report on a Form 20-F for the year ended December 31, 2015.
On November 18, 2020, during market hours, Muddy Waters Research published a report alleging that JOYY, among other things, had: (i) reported fraudulent revenue; (ii) component businesses that were a fraction of the size that it reports; and (iii) acquired Bigo, Inc. (“Bigo”) as part of a scam that benefitted corporate insiders. Specifically, the report alleged that up to 90% of JOYY’s live revenue was fake after Muddy Waters Research discovered that the financial statements for the top 5 JOYY live channel owners showed an 85.9% revenue discrepancy when compared with that of JOYY. Further, the report indicated that JOYY engaged in a roundtripping scheme where the majority of the live performers’ gift revenue came from themselves and JOYY-controlled bots. Finally, Muddy Waters Research examined JOYY’s acquisition of Bigo in October 2014, and determined that the majority of Bigo’s revenue was fraudulent and that the acquisition was designed to enrich defendant, David Xueling Li, JOYY’s Chief Executive Officer and Chairman during the Class Period.
Following this news, JOYY’s American Depository Receipts fell $26.53 per share, or 26.4%, to close at $73.66 per share on November 18, 2020.
The complaint alleges that throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (1) JOYY dramatically overstated its revenues from live streaming sources; (2) the majority of users at any given time were bots; (3) JOYY utilized these bots to effect a roundtripping scheme that manufactured the false appearance of revenues; (4) JOYY overstated its cash reserves; (5) JOYY’s acquisition of Bigo was largely contrived to benefit corporate insiders; and (6) as a result, the defendants’ public statements were materially false and/or misleading at all relevant times.
If you are a member of the class described above, you may no later than January 19, 2021 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP (James Maro, Esq. (484-270-1453) or Adrienne Bell, Esq. (484-270-1435)); toll-free at (844) 887-9500; or via e-mail at email@example.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
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