下面是小编为大家整理的浑水做空YY全文：一个由机器人构成虚拟王国,供大家参考。
Report Date: November 18, 2020
Industry: Internet Fraud Company: Joyy Inc. Stock Price: $100.19
Market Cap: $8 billion Ticker: YY US
Average Daily Volume (30-day): $109.5 million
YY:
You
Can’t
Make
This
Stuff
Up.
Well…Actually
You
Can
While
trawling
the
sewers
of
the
world’s
capital
markets
over
the
past
10
years,
irony
has
never
been
in short
supply.
And
yet,
nothing
could
prepare
us
for
the
surreality
of
Baidu
announcing
its
intention
to buy
YY
Live
from
JOYY,
which
happened
just
as
we
were
preparing
to
reveal
that
our
year-long investigation
shows
YY
Live
is
about
90%
fraudulent.
It
was
clear
to
us
from
early
on
that
YY
Live
was
almost
entirely
fake.
YY
Live
is
an
ecosystem
of mirages.
Its
supposedly
high-earning
performers
in
reality
take
home
only
a
fraction
of
their
reported totals.
The
purportedly
independent
channel
owners
are
largely
controlled
by
YY
in
order
to
facilitate continuous
sham
transactions.
The
legions
of
benefactor
fans
are
almost
entirely
bots
operating
from YY’s
internal
network
(~50%
of
YY
Live
gift
volume),
bots
operating
from
external
bot
farms,
and performers
roundtripping
gifts
to
themselves.
We
conclude
that
YY
Live
is
~90%
fraudulent.
YY’s international
livestreaming
business,
Bigo,
seems
barely
more
real.
So,
the
question
is:
What
will
Baidu
do?
It’s
no
secret
that
Baidu
is
struggling
to
grow.
But
will
Baidu really
try
to
buy
“growth”
in
the
form
of
an
almost
completely
fake
business?
And
for
$3.6
billion
cash, or
seven
percent
of
its
market
cap?!
We
have
been
arguing
for
the
past
10
years
that
the
rot
in
“China Inc.”
is
far
greater
than
most
investors
either
understand
or
admit.
Many
have
called
us
overly
cynical. Baidu
/
YY
Live
will
be
THE
test
of
whether
China
Inc.
is
really
just
a
few
bad
apples;
or,
whether
the incessant
cheating,
lying,
and
indifference
to
U.S.
law
permeate
the
highest
echelons
of
China’s
public companies.
In
April,
Baidu’s
ethics
committee
released
a
statement
in
response
to
the
arrest
of
its
group
vice president
of
finance
and
former
CFO,
which
read
in
part: 1
“Baidu
resolutely
cracks
down
on
all
violations
of
the
law
and
discipline,
and
has
zero
tolerance for
any
behavior
that
touches
the
red
line
of
professional
ethics.
It
will
never
relax
for
anyone,
at any
time!” 2
1
https://www.tellerreport.com/business/2020-04-22-baidu-again-exposed-senior-executives-to-corruption--and- who-was-arrested--vice-president-wei-fang-.rySm4XT_8.html
2
https://cntechpost.com/2020/04/21/former-baidu-vice-president-transferred-to-judiciary-for-suspected-corruption/
To
Baidu
we
say,
“You’ve
announced
that
you’re
going
to
pay
seven
percent
of
your
market
cap
in
cash for
a
business
that’s
almost
entirely
fraudulent.
The
enormous
scale
of
this
fraud
will
be
inescapable
in due
diligence.
You
say
there
are
real
ethics
and
respect
for
the
law
at
Baidu?
Show
us.”
Summary We
are
short
JOYY
Inc.
(YY)
because
we
conclude
that
YY
is
a
multibillion-dollar
fraud.
We
conclude that
YY’s
component
businesses
are
a
fraction
of
the
size
it
reports,
and
that
the
company’s
reported
user metrics,
revenues,
and
cash
balances
are
predominantly
fraudulent.
Our
conclusions
apply
not
only
to
the legacy
YY
Live
business,
but
also
to
Bigo,
YY’s
online
dating
business,
and
really
everything
these people
have
touched.
Approximately
84%
of
YY’s
reported
consolidated
revenue
appears
to
be
fraudulent.
Changing
our base
case
assumptions
to
more
company-favorable
/
conservative
assumptions
yields
consolidated fraudulent
revenue
of
approximately
73%.
We
have
observed
three
primary
methods
through
which
YY
commits
fraud:
o
Paying
User
(“PU”)
bots
from
YY’s
own
servers
–
in
our
data
sample,
gifts
associated
with YY’s
own
servers,
disguised
as
PUs,
constituted
roughly
half
of
the
total
value
of
all
gifts sent.
o
Performers
whose
gifts
are
recycled
into
the
system
through
alter
ego
PU
accounts.
We understand
that
the
top
performers,
who
purportedly
earn
tens
of
millions
of
RMB
per
year, are
in
fact
often
on
fixed
salaries
paying
them
no
more
than
2.5
million
RMB
per
year (~$350,000).
o
Channel
owners,
which
manage
performers,
are
part
of
the
scheme.
The
large
channel owners
are
primarily
owned
by
former
YY
employees
who
are
clearly
“in
on”
the
scam. PRC
credit
bureau
report
financial
statements
for
the
five
largest
channel
owners
show combined
2018
revenue
of
only
~15%
of
what
YY
claims.
We
conclude
that
YY
Live,
Bigo,
and
YY’s
online
dating
business
are
substantially
fraudulent:
o
We
conclude
that
~90%
of
YY
Live’s
livestreaming
revenue
is
fraudulent.
Livestreaming accounts
for
~95.8%
of
purported
Q3
2020
YY
Live
revenue.
o
We
conclude
that
~80%
of
YY
Live’s
online
dating
revenue
is
fraudulent.
Online
dating accounts
for
~20%
of
purported
YY
Live
revenue.
o
We
estimate
that
~80%
of
Bigo
revenue
is
fraudulent.
Using
more
company-favorable assumptions
yields
a
fraudulent
revenue
contribution
of
~60%.
o
Bigo’s
Singapore
parent
changed
auditors
three
times
in
its
first
four
years.
Bigo
also received
three
consecutive
going
concern
opinions
from
its
auditor
in
2016-2018.
Bigo
made a
major
restatement
of
its
2017
financials
in
August
of
2019,
months
after
the
acquisition
by YY
was
complete.
These
fact
patterns
support
our
conclusion
that
Bigo
is
also
substantially fraudulent.
o
Bigo’s
rot
stems
from
its
inception.
YY
claims
that
it
purchased
Bigo
from
Chairman
David Li.
This
is
a
lie
that
enabled
Chairman
Li
to
take
at
least
$156.1
million
of
real
money
from YY
shareholders
and
for
YY
to
fraudulently
report
remeasurement
gains
in
its
profits.
In reality,
YY
founded
Bigo
–
not
Chairman
Li.
o
Bigo
consolidates
a
significant
amount
of
revenue
from
Mainland
China.
Bigo
tacked
on
a mainland
China
business
Hello
that
we
believe
to
be
almost
entirely
fake,
per
our
primary diligence
and
discussions
with
former
Bigo
employees.
As
of
Q3
2020,
we
estimate
this overwhelmingly
fraudulent
PRC
unit
was
still
13.4%
of
Bigo’s
reported
revenues.
We
researched
YY’s
businesses
for
more
than
one
year,
taking
a
two-prong
approach.
The
first
prong
was
macro
data
collection
and
analysis
through
automated
means
of
115.6
million
transactions. The
second
prong
was
traditional
Muddy
Waters
techniques
of
reviewing
filings
and
accounts, undercover
fieldwork,
and
human
sourcing.
Studying
various
purportedly
top
earning
performers
closely
shows
the
enormity
of
the
fraud
on
a micro
level:
o
Purported
pop
music
success
Modern
Brothers
gives
free
concerts
in
a
popular
shopping
area, and
yet
attendee
“fans”
are
paid
to
show
up.
Modern
Brothers
rarely
performs
on
YY
Live these
days,
but
they
receive
gifts
continuously
through
the
platform
when
off
air.
Many
of these
gifts
were
coming
from
YY’s
servers.
Analyzing
data
from
96
randomly
selected purported
donors
shows
that
~97.9%
of
sampled
gift
revenues
were
likely
fake.
o
A
random
sample
of
YY
PUs
in
Wuhan
during
its
COVID-19
lockdown
indicated
that
~87.5%
of
their
gift
revenues
were
likely
fraudulent.
The
majority
of
the
fraudulent
PUs
had mobile
device
IDs
(IMEIs)
linking
back
to
YY
servers,
while
a
significant
minority
of
Wuhan PUs
displayed
IP
addresses
that
inexplicably
jumped
from
city
to
city
amid
the
lockdown.
o
“Big
Li”
is
a
big
lie.
Big
Li
won
YY’s
2019
annual
competition
for
the
most
gifts
received. However,
our
data
shows
that
during
this
December
event,
Big
Li’s
mobile
device
was
shared with
his
largest
contributor,
who
sent
RMB
seven
million
in
gifts,
or
approximately
40%
of the
total.
Beyond
that,
devices
associated
with
his
sent
more
in
gifts
than
Big
Li
received, laying
bare
a
network
of
related
accounts
that
recycle
gifts
and
inflate
YY’s
revenue
totals.
o
Top
Bigo
earner
RCT_Khan
purportedly
receives
~$50,000
in
gifts
per
month
for
literally sitting
at
his
desk
doing
paperwork.
His
stream
gets
even
less
enthralling,
with
the
camera often
pointed
at
the
wall
or
ceiling.
Until
very
recently,
his
purported
#2
contributor
was clearly
himself.
(His
other
top
contributors
are
almost
certainly
part
of
a
gift
recycling network.)
o
We
lay
out
findings
from
four
additional
top-earning
performers,
four
more
Top
PUs,
and numerous
interviews
with
senior
members
of
the
YY
ecosystem
supporting
our
finding
that YY
Live
and
Bigo
are
a
sham
and
their
gift
revenue
is
substantially
fake.
Contents
Our Data Analysis and Sampling Indicate that ~90% of YY Live Revenue Is Fake
................. 5 Data
Collection
and
Analysis
Methodology
.............................................................................................. 5
YY-Controlled
PUs
Generated
Roughly
Half
of
YY
Gift
Revenue
in
December
2019
.............................. 6
Internal
Network
FUs
and
YY
Server
FUs
Revealed
Themselves
Through
Glitches
................................ 7
YY
Live’s
Platform
Angels
Program
Shows
Only
1
in
3
FUs
Can
be
Spotted
by
IMEI
Sharing
................. 8
Sampling
Wuhan...
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