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PricewaterhouseCoopers Expands Audit of NQ Mobile

  +Follow July 3, 2014 10:53AM
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PricewaterhouseCoopers, NQ mobile stock, NetQin mobile stock, china stocks, fraud, audit

Shares of NQ Mobile (NQ) fell nearly 30 percent in the shortened pre-holiday July 3 trading day after PricewaterhouseCoopers announced they were expanding their fraud investigation into alleged securities fraud on the part of the Chinese software company.

Of particular interest to shareholders of the company were hints that NQ is not cooperating with external investigators. In the midst of the investigation NQ both suddenly replaced the chair of the audit committee and reportedly stalled on requests from PricewaterhouseCoopers for more detailed information on their financials.

And still, NQ has failed to provide its 2013 fiscal year financial report. All this adds up to increased ammunition for NQ’s army of cynics, who have called this company an outright fraud since last fall.

Short Getting Deeper

The major accusation against NQ originate from famed short seller Muddy Waters, who have long stood by accusations that the company is almost certainly a house of cards built on fabricated user numbers and greatly exaggerated revenues.

A subsequent audit commissioned by NQ found no discrepancies that indicated fraud, sending shares into recovery mode. A major deal with Sprint (S) to incorporate NQ software into Sprint phones galvanized the company’s supporters, and gave credence to counter-accusations that Muddy Water’s campaign against NQ was simply a case of a short-seller trying to capitalize on a resulting equity sell-off.

That first audit, undertaken by Deloitte, did little to convince the investors who took bearish bets against NQ. Carson Block, the brains behind Muddy Waters, stuck steadfastly to his opinion that the company was primed for complete collapse. According to Block, the Deloitte exoneration (conducted in conjunction with NQ directors) was just another scam, and he told Reuters that the Deloitte audit was “just another in a long line of whitewashes carried out by China companies that are defrauding U.S. investors, written by directors in China who have no accountability to U.S. authorities."

Since Block’s salvo, the short float on NQ – which was already sizable – has metastasized. On May 30, the portion of shares bet against the company stood at 44.33%. On July 3, that number had grown to 48.97%, making NQ the most heavily shorted stock in the entire Tech sector.

Are NQ Investors Masochists?

So what keeps investors coming back to NQ? The company certainly has its legitimate backers, counting both Sprint and Samsung (SSNLF) as partners. The allure of potential profits to be made from contrarianism also helps considerably. If such a large percentage of investors are shorting the stock the share price could get squeezed up – that is, if the calls expire before auditors fail to uncover fraud in time, either via NQ’s stalling or (possibly) because there is no fraud to uncover.

Either way the price action of NQ, which sports substantially higher volume than should be expected of a small-cap tech play, should remain highly interesting for the foreseeable future, as either the bulls or the bears get rich on this battleground stock.  

As the July 3 half trading concluded, shares of NQ Mobile had fallen 32.25 percent to hit $4.58 a share. The company's stock has fallen 57.91% on the year.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for NQ
Jim Harrison
29 Jul 15 16:30:31
Of Interest: $ES $NQ $YM $TF $ZB Vendor News: July 29, 2015 - SS&C Technologies Reports Q2 2015 Results http://t.co/L2pnYoK6KR
MrDev
29 Jul 15 13:05:46
TYPICAL FED $VIX CONTROL ON FED DAY IE 10AM SPIKE LOW SETTIN DA TONE BUT WE CLOSED W/ DEV SELL SIGNAL $NDX $UVXY $SPX $SOXS $TF $TZA $ES $NQ
Wayne Lord
29 Jul 15 12:37:19
In the last 5 days, the Nasdaq 100 Index $NQ $NDX showing relative weakness compared to S & P 500 Index $ES $SPX.
Jim Harrison
29 Jul 15 12:06:55
Of Interest: $ES $NQ $YM $TF $ZB Blog Post: TheAlephBlog: Redacted Version of the July 2015 FOMC Statement http://t.co/3YomqsDGki
MarketWeight
29 Jul 15 11:37:38
Don't fret. There's still after hours to continue ramping when there's zero participation. $ES $TF $NQ $YM
Alphatalk
29 Jul 15 11:25:44
u bots do what u will my L $NQ stays no way ur going to ramp the market higher without paying me..
Alphatalk
29 Jul 15 10:32:44
$NQ hasn't given me 1tick above my avg cost for the last 1.5 hrs
Alphatalk
29 Jul 15 10:10:44
$NQ 61.25, 68.25 are last two days highs, break above takes it toe 84.25 and if it explodes to 4634.. on the down 4544.5 then 4503.5
Alphatalk
29 Jul 15 10:04:23
$NQ ugly bot seems to have come online
Alphatalk
29 Jul 15 09:28:32
now I know why my L $NQ at 10:18:42.304 pulled lower .. wondering which firm send those orders https://t.co/TpCs0vIeiE
brian sweetheart
29 Jul 15 09:27:46
Voted top trading group. http://t.co/5eVXN8RJLp Related: $NOK $ATML $AVP $BBRY $CRC $AKS $NQ
DailyStockPicks
29 Jul 15 09:18:47
$OCLS $OCLSW break out up 10% today. Price target of $5 $MDSO $BTI $NQ $RBCN $WLDN $COKE investors read http://t.co/rWpJvFmAFr
the.lost.boy
29 Jul 15 08:40:08
watch out for bull traps $NQ
SmallCaps
29 Jul 15 08:26:18
http://t.co/kjjiAh7er2 <- the number one reason you will fail or succeed as a trader $LIVE $NVEE $CAMT $NQ $TWTR $STUDY
the.lost.boy
29 Jul 15 08:24:01
$NQ topping off, got a huge amount of room left for downside
Urban Carmel
29 Jul 15 08:09:18
$NQ at breakeven with $ES up 0.4%
Wall Street
29 Jul 15 06:03:19
The Penny Stock Superstar team voted #1 OTC trading group. http://t.co/cQ0lLTokka Related: $WSTI $NQ $GEVO $GNW $WIN $FCEL
Mark Trader
29 Jul 15 05:39:09
100% non-compensated picks at http://t.co/R6BGOmTldH. That is awesome. Related: $RXII $NQ $AKS $ICLD $CTIC $VMEM $PMCB
Jim Harrison
29 Jul 15 01:40:56
Of Interest: $ES $NQ $YM $TF $ZB Blog Post: TheAlephBlog: Pick a Valid Strategy, Stick With It http://t.co/zGTb7ElJHv
Jim Harrison
28 Jul 15 20:25:57
Of Interest: $ES $NQ $YM $TF $ZB Published / Preprint: Detect & Describe: Deep learning of bank stress in the news… http://t.co/m40KyPJHFY
SmallCaps
28 Jul 15 16:52:59
http://t.co/kjjiAh7er2 <- the number one reason you will fail or succeed as a trader $LIVE $NVEE $CAMT $NQ $TWTR $STUDY #stocks
The God of Trading
28 Jul 15 13:11:57
Simple advice and great, and all too often ignored by everyone. #PaulTudorJones $ES $NQ https://t.co/8ToiDuedsT
Alphatalk
28 Jul 15 13:01:39
alright end of another rotton day.. $NQ ramp right after close
Jim Harrison
28 Jul 15 12:15:42
Of Interest: $ES $NQ $YM $TF $ZB Vendor News: July 28, 2015 - SS&C plans Evansville, Indiana expansion; adds capac… http://t.co/8Muy0wPqf4
Alphatalk
28 Jul 15 12:08:17
$NQ has a 4584 low target if we ramp higher from here
Alan Farley
28 Jul 15 11:35:48
Turn south started as soon as N100 futures $NQ filled Monday's gap. $QQQ a bit higher than that.
MrDev
28 Jul 15 11:25:20
DEV SELL SIGNALS COME ON UP DAYS DURING DOWN TRNEDS W/ OB THRUST & EX OB THRUST $NDX $VIX $UVXY $SPX $INDU $DJ $TF $TZA $ES $YANG $NQ $SOXS
MrDev
28 Jul 15 11:23:22
MRKT SETTING UP A DEV SELL SIGNAL INTO OVERBOUGHT THRUST TODAY & W/ EXTRM TOMORROW $NDX $VIX $UVXY $SPX $INDU $DJ $TF $TZA $ES $YM $NQ $SOX
Alphatalk
28 Jul 15 11:14:19
@LongTplexTrader @ChiTownBA i was L $NQ is it went into grind, then i went S and it spiked 10pts, only given seems to be FU risk taker
Alphatalk
28 Jul 15 11:07:04
$NQ in outright manipulation mode here ..
MrDev
28 Jul 15 09:32:16
60M THRUST = OVERBOUGHT IF WE CLOSE HERE ANY UPDAY WED = DAILY EX OB THRUST &DOWN THURS $RUT $NDX $VIX $UVXY $SPX $INDU $DJ $TF $TZA $ES $NQ
MrDev
28 Jul 15 09:07:22
THRUST EXTREMES w THIS MONTHS $RUT/ $VIX CHART $NDX $VIX $UVXY $SPX $INDU $DJ $TF $TZA $ES $YM $NQ $SOXS $YANG $DWTI http://t.co/l7NYXhCUtC
Alan Farley
28 Jul 15 08:49:54
N100 dealing with the into-but-not through gap conundrum. $QQQ $NQ
Wall Street
28 Jul 15 08:46:52
The Penny Stock Superstar team voted #1 OTC trading group. http://t.co/cQ0lLTokka Related: $WSTI $NQ $GEVO $GNW $WIN $FCEL
Wall Street
28 Jul 15 08:03:57
The Penny Stock Superstar team voted #1 OTC trading group. http://t.co/cQ0lLTokka Related: $WSTI $NQ $GEVO $GNW $WIN $FCEL
Penny Stock Secret
28 Jul 15 06:55:32
$71,000 in ONE TRADE!! By Follwing Their Signals More Info Here http://t.co/SVqoMkrw2z .. $NPTN $NPV $NQ
Mark Trader
28 Jul 15 06:01:03
100% non-compensated picks at http://t.co/R6BGOmTldH. That is awesome. Related: $RXII $NQ $AKS $ICLD $CTIC $VMEM $PMCB
Wall Street
28 Jul 15 05:56:47
The Penny Stock Superstar team voted #1 OTC trading group. http://t.co/cQ0lLTokka Related: $WSTI $NQ $GEVO $GNW $WIN $FCEL
Jim Harrison
28 Jul 15 05:42:30
Of Interest: $ES $NQ $YM $TF $ZB Boeing patents laser-powered fusion-fission jet engine (that’s truly impossible) http://t.co/Tku2T93p3T
Jim Harrison
28 Jul 15 05:42:30
Of Interest: $ES $NQ $YM $TF $ZB China's stock market remains jittery after greatest losses since 2007 http://t.co/05gMqzrncU
Jim Harrison
28 Jul 15 05:42:30
Of Interest: $ES $NQ $YM $TF $ZB Genes influence academic ability across all subjects, latest study shows http://t.co/zC4j26wphb
Jim Harrison
28 Jul 15 05:42:30
Of Interest: $ES $NQ $YM $TF $ZB Amazon stock surge makes CEO Jeff Bezos $7bn richer in 45 minutes http://t.co/FUNdFSbVMS
Jim Harrison
28 Jul 15 05:42:29
Of Interest: $ES $NQ $YM $TF $ZB Blog Post: TheAlephBlog: Twenty Enduring Posts http://t.co/jNRaBN3jza
Jim Harrison
28 Jul 15 05:27:32
Of Interest: $ES $NQ $YM $TF $ZB Modern Markets Initiative Asks, What's in a Name? | Traders Magazine Online News … http://t.co/ruxcjpApOF
Thomas Collins
28 Jul 15 05:02:55
$NQ NQ Mobile Inc. (NQ) Traders Foresee Short-Term Upside http://t.co/Yk0w5fJLQw
Jim Harrison
28 Jul 15 01:27:24
Of Interest: $ES $NQ $YM $TF $ZB Vendor News: Fidessa enhances equities trading platform http://t.co/FnDqsfr8xe
Jim Harrison
28 Jul 15 01:27:24
Of Interest: $ES $NQ $YM $TF $ZB Why did HSBC shut down bank accounts? - BBC News http://t.co/dsTKgvKAr2
Investors Hangout
28 Jul 15 00:50:05
XLY Consumer Discretionary Select Sector SPDR Investor Opinions http://t.co/OEMNCkkIn4 $XLY $RCAP $AMDA $NQ #XLY #stockmarket #stock
Rosner Stocks
28 Jul 15 00:50:04
XLY Consumer Discretionary Select Sector SPDR Ask http://t.co/qQj2gC6Wza $XLY $EWC $BIIB $NQ #XLY #stock #stock
IH NASDAQ OMX
28 Jul 15 00:50:04
XLU Utilities Select Sector SPDR Tick http://t.co/aBelvVwIMF $XLU $NQ $WMT $EDC #XLU #investing #investXLV Health Care Select Sector…
				
				
  +Follow July 3, 2014 10:53AM
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