NQ Mobile crashes as Muddy Waters calls company a "massive fraud'
- Muddy Waters has started coverage on NQ Mobile (NQ -30%) with a Strong Sell; the firm's target price is below $1. (report - .pdf)
- MW claims at least 72% of NQ's 2012 Chinese security software revenue ($32.2M) is "fraudulent," and that much of it ($20.2M) came from a shell company called Yidatong. The firm says an investigation found Yidatong's offices were "either non-existent or completely empty."
- MW also declares NQ's third-party payments channel to be "non-existent," and its Chinese payments portal to be "purely cosmetic." It estimates (citing survey data) NQ has only a 1.4% share of the Chinese security app market rather than a stated 55%, and that Qihoo (QIHU -0.5%) dominates the space with a 73.5% share. Also, MW's store checks indicated few phones had NQ's software pre-installed, and that its prepaid card sales were limited.
- Meanwhile, NQ's apps are declared to be "spyware," and its global app revenue below $1M/year. The company's acquisitions are deemed "highly likely to be corrupt," with ghost addresses uncovered for some of them, and its cash balances "highly likely to not exist."
- Update (2:01PM ET): The selloff has worsened. NQ now -51.8%.
Below these are the Performing China stocks of the day October 24, 2013.
Ticker Company Change
CSUN China
Sunergy Co. Ltd. 8.93%
EDU New Oriental
Education & Technology Group 5.44%
VIPS Vipshop
Holdings Limited 5.30%
BIDU Baidu, Inc. 3.59%
YY YY Inc. 2.89%
XRS TAL Education
Group 2.44%
BITA Bitauto Holdings
Limited 2.11%
JKS JinkoSolar
Holding Co., Ltd. 1.97%
SINA Sina Corp. 1.69%
NTES NetEase.com, Inc. 1.59%
JASO JA Solar
Holdings Co., Ltd. 1.18%
YOKU Youku Inc. 1.17%
HMIN Home Inns &
Hotels Management Inc. 1.12%
QIHU Qihoo 360
Technology Co. Ltd 0.90%
TSL Trina Solar
Limited 0.87%
EJ E-House (China)
Holdings Limited 0.85%
DANG E-Commerce China
Dangdang Inc. 0.51%
HPJ Highpower
International, Inc. 0.44%
RENN Renren Inc. 0.26%
YGE Yingli Green
Energy Holding Co. Ltd. 0.15%
CTRP Ctrip.com
International Ltd. 0.07%
SFUN SouFun Holdings Ltd. 0.00%
ISS Isoftstone
Holdings Limited 0.00%
PACT Pactera Technology International Ltd. 0.00%
SPRD Spreadtrum
Communications Inc. -0.16%
GA Giant
Interactive Group, Inc. -0.32%
LITB LightInTheBox
Holding Co., Ltd. -0.35%
SOHU Sohu.com Inc. -0.47%
VNET 21Vianet Group,
Inc. -0.64%
YONG Yongye
International, Inc. -0.92%
SOL ReneSola Ltd. -0.98%
XIN Xinyuan Real
Estate Co., Ltd. -1.84%
GAME Shanda Games
Limited -2.41%
KNDI Kandi
Technologies, Corp -2.93%
PWRD Perfect World Co.,
Ltd. -3.66%
CXDC China XD Plastics
Company Ltd. -3.96%
FENG Phoenix
New Media Limited -4.19%
BORN China
New Borun Corporation -4.57%
CCIH ChinaCache
International Holdings Ltd. -4.60%
KUTV Ku6 Media Co., Ltd. -4.91%
HSOL Hanwha SolarOne Co., Ltd -5.04%
NOAH Noah Holdings
Limited -5.24%
MY China Ming Yang
Wind Power Group Limited -7.21%
MOBI Sky-mobi Limited -7.41%
VISN VisionChina Media Inc. -10.51%
NQ NetQin Mobile
Inc. -50.74%
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