YY - YY Inc.

[Steven B]

There are plenty of different streaming options in China. What are the possibilities for earnings falling off a cliff? From some quick searches it seems YY isn't as innovative and integrated as other players. Weibo and all. If you told me that in 5 years they've lost half of their streaming business I couldn't argue that it's impossible. Would like to be proven wrong because 2x FCF is a big matzo ball hanging out there.

 

It seems that their clientele is more from the 3rd and 4th tier cities, who would be the first to have problems in any economic downturn.

 

Just throwing in my 2 cents from a quick look. Good luck to the longs.

[Jurgis]

http://www.sixthtone.com/news/1003642/inside-the-dystopian-reality-of-chinas-livestreaming-craze

[MrB]

http://www.sixthtone.com/news/1003642/inside-the-dystopian-reality-of-chinas-livestreaming-craze

Hollywood 2.0

[Spekulatius]

http://www.sixthtone.com/news/1003642/inside-the-dystopian-reality-of-chinas-livestreaming-craze

Hollywood 2.0

 

It’s a business waiting for a crackdown from big brother.

[Jurgis]

http://www.sixthtone.com/news/1003642/inside-the-dystopian-reality-of-chinas-livestreaming-craze

Hollywood 2.0

 

It’s a business waiting for a crackdown from big brother.

 

The crackdown is already there.

 

Providers have to monitor and ban sexual eating of bananas.

[Jurgis]

I sold my YY position.

 

I think the MuddyWaters report about fraud ( https://www.muddywatersresearch.com/research/yy/1/ ) is mostly crap.

 

On the positive side, YY sold (most of?) China business to Baidu and it's likely Baidu is not buying fraudulent business/accounting. On the negative side, YY got pretty cheap price for its China business, which either indicates that their China business was crap (fraudulent ;)) or that their arm was twisted or that they want to get out of China at any cost. All three possibilities are not positive. Also, investment into YY going forward is based on assumption that they won't siphon the cash from sale to management/whoever and that they will manage to grow non-China business (Bigo) and make it profitable, etc. There are too many unknowns for me.

 

Anyway, I'm not China expert, so I'd be happy to hear in depth input from people who know the business and the politics around it.

 

Edit: OT: I stopped watching movies. Listening to investment pitches and reading (short) investment reports is much more fun, drama, and action. I'll quote MuddyWaters: "You Can’t Make This Stuff Up.  Well...Actually You Can"

[serendibz]

I sold my YY position.

 

I think the MuddyWaters report about fraud ( https://www.muddywatersresearch.com/research/yy/1/ ) is mostly crap.

 

 

Why do you think it is mostly crap?

[Spekulatius]

I sold my YY position.

 

I think the MuddyWaters report about fraud ( https://www.muddywatersresearch.com/research/yy/1/ ) is mostly crap.

 

 

Why do you think it is mostly crap?

 

I owned this for a short time in 2018 and felt that the company is if not fraudulent, then at least fairly shady.

 

There were some weird transaction with their Huya esports subsidy at that time, that made little sense.

 

When you look at these live streams, you wonder why anybody would pay or give gifts or tokens for this. none of my Chinese relatives new much about those, much less watch this. just about everything that you see and read about this company seems off. I sold at small loss and moved on.

 

I do think there is likely truth in what MW has been writing about YY. For a fraud, it hasn’t performed too badly though.

[HJ]

Here's.a documentary on the live streamers at YY.  Like a lot of media stats in China, whether things are fraud or exaggeration is in the eyes of the beholders.  4MM subscriber is also not a huge % of the Chinese population, so while I don't know people who use it, my immediate friends are probably not the right demographic for this.  It wouldn't be surprising though if that number is off by a factor of 2-3 (exaggeration), not 10 (fraud).

 

https://www.desire.film/

 

And this is an interview with the film maker. 

 

[Jurgis]

I sold my YY position.

 

I think the MuddyWaters report about fraud ( https://www.muddywatersresearch.com/research/yy/1/ ) is mostly crap.

 

 

Why do you think it is mostly crap?

 

I am no longer interested in YY, so I won't spend time on extensive analysis of MW report.

IMO, the exaggerations of the gifting - especially in "tournament" where highest gifted wins - are real.

OTOH, it does not necessarily mean that the company is behind these exaggerations and that the company fakes their bank accounts.

Let's leave it at that.

[Jurgis]

When you look at these live streams, you wonder why anybody would pay or give gifts or tokens for this.

 

So in your opinion Twitch donations are also fake? Organized by Amazon/Bezos to inflate their revenues and stock price! ........ just kidding  8)

 

There is actual community and culture of gifting for live streams. Mostly not by cheap value investors though. ;)

 

 

To be fair, there is also buying of fake followers and fake fans. On western services too. Youtube, Instagram, Twitter, etc. Just search for "buy followers".  ;) Does not mean that Google / Facebook are cooking their books though.

 

 

I'm not saying that YY is all clean. I have issues with what they do, which is why I sold. Not because of MW report. It is possible that YY is totally fraudulent. My guess is that it isn't, but there's enough questionable behavior to avoid it.

[Spekulatius]

When you look at these live streams, you wonder why anybody would pay or give gifts or tokens for this.

 

So in your opinion Twitch donations are also fake? Organized by Amazon/Bezos to inflate their revenues and stock price! ........ just kidding  8)

 

There is actual community and culture of gifting for live streams. Mostly not by cheap value investors though. ;)

 

 

To be fair, there is also buying of fake followers and fake fans. On western services too. Youtube, Instagram, Twitter, etc. Just search for "buy followers".  ;) Does not mean that Google / Facebook are cooking their books though.

 

 

I'm not saying that YY is all clean. I have issues with what they do, which is why I sold. Not because of MW report. It is possible that YY is totally fraudulent. My guess is that it isn't, but there's enough questionable behavior to avoid it.

 

Yes, I am familiar with Twitch and communities there. Those are real. i would agree with you that YY is shady, but not necessarily totally fraudulent. Doesn’t matter because neither one seemed like something I want to invest in a few years back and I left it at that.

 

A lot of folks on fintwit like to “buy” followers too.