NQmobile is muddy watered

bigbadwolf

Muddy water raided NQ as strong sell.

bigbadwolf

Muddy Waters sets its sight on China’s NQ Mobile
October 24, 2013, 5:04 PM

Muddy Waters Research, no stranger when it comes to ferreting out problematic Chinese companies, has initiated coverage of NQ Mobile Inc.  NQ at a strong sell, calling it a “massive fraud.” In an 80-page  report published Thursday, Muddy Waters argued that most of NQ’s data were unreliable.

     ”At least 72% of NQ’s purported 2012 China security revenue is fictitious. NQ’s largest customer by far is really NQ. Our research estimates that NQ’s real market share in China is only about 1.5%, versus the approximately 55% it reports. We estimate that its China paying user base is less than 250,000, versus the six million NQ claims,” Muddy Waters wrote.

U.S.-listed shares of NQ Mobile, a Beijing-based mobile Internet services provider, lost almost half of their value to close at $12.09.

NQ rejected Muddy Waters’ research and said it will respond “quickly, transparently and forcefully.” The Chinese company plans to issue a more detailed statement before Friday’s market open, it said. That will give the U.S. team plenty of time to confer with the powers to be in China on how to handle this potentially damaging report.

Meanwhile, the Securities and Exchange Commission may be getting involved at some point, particularly if the information sent in by Muddy Waters turn out to be reliable.

– Sue Chang