logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

PricewaterhouseCoopers Expands Audit of NQ Mobile

  +Follow July 3, 2014 10:53AM
Share:
Tickers Mentioned:

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.


Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for NQ
Blanco Options
27 Feb 15 08:46:57
RT @HarrisStevenJ: Trying to plan my day. When does the intraday #NASDAQ reversal happen so that we hit 5000 today? $NQ
Breaking News
27 Feb 15 08:36:03
$NQ: NQ Mobile: FL Mobile Reverse Merger Might Be A Bonus For Longs ...: http://t.co/TkJkEKrBs1
Quantpost Technology
27 Feb 15 08:27:26
$NQ News: "NQ Mobile: FL Mobile Reverse Merger Might Be A Bonus For Longs, But…" http://t.co/ELTxBye0bQ Board view: https://t.co/Wka9zvV0zm
Tech Stocks SA
27 Feb 15 08:27:23
NQ Mobile: FL Mobile Reverse Merger Might Be A Bonus For Longs, But For All The Wrong Reasons http://t.co/XVpd0L9tUk $NQ
China Investor
27 Feb 15 08:27:23
NQ Mobile: FL Mobile Reverse Merger Might Be A Bonus For Longs, But For All The Wrong Reasons http://t.co/MBoG46z7Rb $NQ
Seeking Alpha
27 Feb 15 08:27:23
NQ Mobile: FL Mobile Reverse Merger Might Be A Bonus For Longs, But For All The Wrong Reasons http://t.co/fMT7vAl85Q $NQ
Steven Harris
27 Feb 15 08:17:29
Trying to plan my day. When does the intraday #NASDAQ reversal happen so that we hit 5000 today? $NQ
PennyStocker
27 Feb 15 08:07:22
Wow the last pick from http://t.co/p3LC54H2W5 popped over 450%. Nice for being free. $SIRI $ATOS $NQ $ZNGA
Steven Alexandro
27 Feb 15 07:58:23
RT @SamEvansTrader: If you are prepared to be patient, then a ranging day can be a trader's dream. $NQ is a perfect example of this today. …
Jim Harrison
27 Feb 15 07:46:05
Of Interest: $ES $NQ $YM $TF $ZB Blog Post: TheFinancialServicesClub: The role of the bank branch in the digital age http://t.co/Z0CLmOIuzE
Jim Harrison
27 Feb 15 07:46:04
Of Interest: $ES $NQ $YM $TF $ZB Published / Preprint: Comparing systemic risk in European government bonds and na… http://t.co/KHjqKxDl1O
Jim Harrison
27 Feb 15 07:46:04
Of Interest: $ES $NQ $YM $TF $ZB Published / Preprint: Rational Multi-Curve Models with Counterparty-Risk Valuatio… http://t.co/n7fcxub1Cv
Jim Harrison
27 Feb 15 07:46:04
Of Interest: $ES $NQ $YM $TF $ZB Published / Preprint: Dynamics of quasi-stationary systems: Finance as an example… http://t.co/aOxRHA1x4R
Jim Harrison
27 Feb 15 07:46:04
Of Interest: $ES $NQ $YM $TF $ZB Published / Preprint: Well-Posedness and Comparison Principle for Option Pricing … http://t.co/wG8IUqDHAl
Jim Harrison
27 Feb 15 07:46:03
Of Interest: $ES $NQ $YM $TF $ZB Published / Preprint: Developing Knowledge States: Technology and the Enhancement… http://t.co/ndrlSqfAgZ
Jim Harrison
27 Feb 15 07:46:03
Of Interest: $ES $NQ $YM $TF $ZB Blog Post: iMFdirect: Fiscal Impact of Lower Oil Prices on Latin America and the … http://t.co/PajBUiwGDs
Jim Harrison
27 Feb 15 07:46:03
Of Interest: $ES $NQ $YM $TF $ZB Blog Post: ThePracticalQuant: Topic Models: Past, Present, Future http://t.co/VN02u2NIV0
Sam Evans
27 Feb 15 07:36:47
If you are prepared to be patient, then a ranging day can be a trader's dream. $NQ is a perfect example of this today. Enjoy your weekends!
Shane Torrey
27 Feb 15 07:13:11
I'm not a big fan of $TF or $NQ - makes me gunshy on ES
RogerV
27 Feb 15 06:14:33
$NQ Weekly open to 4496.50 next strong // momentum loss < 4425.50...back fill acceleration < 4350; indicator room for OB > 4550
RogerV
27 Feb 15 06:05:17
$ES, $NQ, $TF, $TF. $DJTA D/W/M come to play so last 60 min should be interesting
Clair Voight
27 Feb 15 05:32:48
$NQ Company Insights : NQ Mobile Inc (ADR) (NYSE:NQ) http://t.co/eutdGN8lI0
RogerV
27 Feb 15 04:41:54
$NQ 60min holds positive consolidation > 4450.00; working 4464.25 for extension
Jim Harrison
27 Feb 15 03:03:47
Of Interest: $ES $NQ $YM $TF $ZB GMEX â going to eleven? http://t.co/HDn2STqTNV
Ciscohitt
27 Feb 15 01:44:40
$NQ Weekly Bull Bear Zone 78.25/83.75 http://t.co/QPpF9uRxI9
Ciscohitt
27 Feb 15 01:35:58
$NQ Levels. Bull Bear Zone = 42/47.50 http://t.co/wPftRqHZHD
Russell Barbour
26 Feb 15 23:24:35
http://t.co/fmOyM2xelz <--- Amazing subscriber to Super_Trades - check out his profit chart!!! $VSR $NQ $SSYS $RGLS $DDD
Stocks News&Markets
26 Feb 15 22:20:33
Nate made $1,686 on $NQ -Check it out! http://t.co/4q2FTmwWWZ Learn #howtotrade http://t.co/axK8SMSgo9 $CYTX $CYCC $RGDX $ATOS $ELX
Energy Shots
26 Feb 15 21:44:28
RT @stockroads: $ABC $AET $AVGO $BABY $BSX $DPS $GPK $JNS $MDT, $MNST $NQ, $OAS $ROST $TSCO $ZTS weekly review 11 weekly high closes http:…
Beverage Consulting
26 Feb 15 15:42:14
RT @stockroads: $ABC $AET $AVGO $BABY $BSX $DPS $GPK $JNS $MDT, $MNST $NQ, $OAS $ROST $TSCO $ZTS weekly review 11 weekly high closes http:…
Sparrtweets
26 Feb 15 15:25:50
Friday Look ahead: German CPI, U.S. GDP, Personal Consumption, Pend. Home Sales, Consumer Confidence $SPX $NQ $DJIA $ES #stocks #economy
RogerV
26 Feb 15 13:55:39
$NQ 60min good close > 4461.50 raises inside range 4474.75/4450.00; outter1 4485.00/4439.50
5280 [trader]™
26 Feb 15 13:41:15
$NQ P2P http://t.co/lmUrOTiKgL
Ciscohitt
26 Feb 15 13:05:57
$NQ Finally we test wks upper fib trgt area. good http://t.co/l7SCgH77cm
Future Tech Investor
26 Feb 15 12:38:26
$KTOS once again EOD buyers comin in $LMT $BA $FB $S $F $GM $YY $JD $N $FEYE $CYBR $AA $T $PFE $Z $ZU $EL $DDD $HPQ $NQ $BAC $AAL $GPS $AXP
RogerV
26 Feb 15 12:28:06
$ES puking 2106.25 getting late; $TF / $NQ well above BTD levels
Ciscohitt
26 Feb 15 11:24:04
$NQ I know these bands don't mean much to u guy's but 60.50 an important number bulls needed > as supp http://t.co/OknNazFKIS
PennyStocker
26 Feb 15 11:17:50
Wow the last pick from http://t.co/p3LC54H2W5 popped over 450%. Nice for being free. $SIRI $ATOS $NQ $ZNGA
Stock Rocket
26 Feb 15 10:09:09
Check out http://t.co/5jbX6lWXsj. They have a cool and different way of doing trade alerts. Pretty cool. $PPP $EXEL $NQ $CDNL $GLUU $CYS
Ciscohitt
26 Feb 15 09:49:43
@Beljevina I think $NQ has to test wks upper fib trgt area, ES/TF tested there's on Tues, Then the fun starts http://t.co/AeAZ20OJWO
Investors Hangout
26 Feb 15 09:16:11
clayton: NQ 4.11 Netqin Mobile Inc $NQ added to my watch http://t.co/VjRRhnAcjz
Investors Hangout
26 Feb 15 09:15:50
clayton: NQ 4.11 Netqin Mobile Inc $NQ added to my watch http://t.co/9sOhCKMRm3
Investors Hangout
26 Feb 15 09:15:49
clayton: NQ 4.11 Netqin Mobile Inc $NQ stock added to my http://t.co/UC3iQo3aSt
Investors Hangout
26 Feb 15 09:15:49
clayton: NQ 4.11 Netqin Mobile Inc $NQ stock added to my http://t.co/uJdmVy2YXz
clayton
26 Feb 15 09:10:44
NQ 4.11 Netqin Mobile Inc $NQ added to my watch list. Right now with NQ I am watching the last price 4.11 High http://t.co/UBW9HPY19V
clayton
26 Feb 15 09:10:19
$NQ NQ 4.11 Netqin Mobile Inc $NQ stock added to my watch list. Right now with NQ I am watching the last price 4.1 http://t.co/7GR8hknB3f
Chris Duhanci
26 Feb 15 08:45:38
@SamEvansTrader (on the $NQ)
Ciscohitt
26 Feb 15 08:43:10
$NQ stayed > 23.6% all week, will it finaly hit it's wks upper fib trgt area. http://t.co/T8I62z5o9v
Amigobulls
26 Feb 15 08:33:34
Chinese internet Stocks 2014 review VIDEO $BIDU $BABA $NQ $VIPS $NTES $YY $SINA $QIHU http://t.co/DGIxvd2eJK
Shane Torrey
26 Feb 15 08:21:24
Be cautious up here. $ES isn't getting pulled with $TF and $NQ. Some divergence - mkt might need some digesting before liftoff.
				
				
  +Follow July 3, 2014 10:53AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.