I am a long holder of NQ and I am trying to figure out one last piece of the puzzle for myself.  The question that has not been answered by Matt or anyone at NQ is one of YDT revenue recognition.  I am an English speaker and would like to read YDT's SAIC fillings in English.  Is that possible?  How would I find it?  I realize there has been talk about gross vs net accounting, but has it been shown in YDT's words.  I would like to see how YDT describes its revenue recognition.

Also if anyone can address why if NQ has small amounts of cash at each subsidiary, why are they not consolidated in the cash position of NQ?  The bank accounts disclosed don't include the Dallas bank account.  Where is that cash?

Again,  I am a long holder and would like the question about YDT revenue recognition answered to make me 100% comfortable that MW is wrong.  The movement of cash of of the term deposits was a nice move to prove they are generating more cash that MW is saying, but YDT is still an overhang in my view.

Thanks for the help here

Hi Bondguy welcome. YTD revenue recognition. YTD is a service provider, they are not a vendor. Think Paypal or UPS.
IE. NQ collects money through YTD. you pay NQ 100$ for a 10 year subscription. YTD collects that 100$ and transfers it to NQ's bank accounts. YTD charges NQ 1% of that, and collects 1$ which it recognizes as its own revenue. It would not recognize 100$ in their revenue just like UPS wouldn't recognize the worth of each package it sends in its revenue and paypal wouldn't recognize the Billions it wires between clients in its revenue.


NQ has so many subsidiaries in different countries in different currencies. Each hold an insignificantly small cash position. Their bank account disclosure totaled apprx 300M while the total in the subsidiaries might total less than 1M. An insignificant amount and deemed not necessary to disclose when the major issue was do they have the cash they claim in their level 2 disclosure in 2012. Also at reporting time, they just roll it up into cash equivalents level 2 to save time and effort instead of having a miniscule number in level 1 cash.

(10-31-2013, 05:15 AM)tradestar2012 Wrote: Actually, I thought YTD was more like a paypal or american express payment processor. They serve as the middlemen between the store front and company.

sorry I meant to say paypal dunno why I said ebay. My brain is fried, too much work and nq research at the same time... will edit in my post

'kshen' pid='30580' dateline='<a href="tel:1383160 Wrote:

Hi Bondguy welcome. YTD revenue recognition. YTD is a service provider, they are not a vendor. Think Paypal or UPS. IE. NQ collects money through YTD. you pay NQ 100$ for a 10 year subscription. YTD collects that 100$ and transfers it to NQ's bank accounts. YTD charges NQ 1% of that, and collects 1$ which it recognizes as its own revenue. It would not recognize 100$ in their revenue just like UPS wouldn't recognize the worth of each package it sends in its revenue and paypal wouldn't recognize the Billions it wires between clients in its revenue. NQ has so many subsidiaries in different countries in different currencies. Each hold an insignificantly small cash position. Their bank account disclosure totaled apprx 300M while the total in the subsidiaries might total less than 1M. An insignificant amount and deemed not necessary to disclose when the major issue was do they have the cash they claim in their level 2 disclosure in 2012. Also at reporting time, they just roll it up into cash equivalents level 2 to save time and effort instead of having a miniscule number in level 1 cash.

Thanks for the response...if that is the case how can MW get YDT rev recognition so wrong based on definition?  Have you read the SAIC fillings for. YDT?

"YDT’s financial statements show that it generated a fraction of the business NQ claims YDT does.  YDT’s purported role is a SP (i.e., transaction processor), facilitating NQ’s billing of mobile carriers in China.2  For NQ to have generated $20.2 million in revenue from YDT, YDT would have to have generated at least that much itself because NQ receives its revenue from YDT net of YDT’s margin.  PRC accounting standards mandate that YDT book all funds it receives from the carriers as its revenue, and then book the payments to NQ and other clients as costs of sales"

"According to SAIC financials, YDT only generated $2.9 million in 2012 revenue, which is 14% of what NQ purports to have generated in revenue from YDT.  YDT would have had to generate at least the $20.2 million NQ purports to have generated from YDT…to say nothing of the 40% of YDT revenue purportedly attributable to other clients.4  YDT’s Cost of Sales account would include any amounts YDT paid to NQ and its other customers.  Instead, YDT generated only $2.9 million in revenue, and had Cost of Sales of only $1.8 million.  NQ reported accounts receivable from YDT of $9.3 million as of FY 2012,5 but YDT’s financials show total accounts payable of $3.7 million, once again showing the fraudulent nature of NQ’s financials. PRC GAAP requires that YDT’s financial statements book revenue gross of payments to NQ and other customers.6  The Business Tax (sales tax) of $97,000 YDT paid was a fraction of the more than $4.0 million it would have paid if it were generating the volumes NQ claims.  The lack of Business Tax payments confirms that YDT’s revenue is shown in its SAIC file on a gross basis.  Under the PRC tax regime, YDT pays Business Tax on the gross amount of revenue it collects from carriers.7  If NQ tries to argue that YDT is just your upstanding tax cheat,8 the argument would not hold water.  The parties that purportedly pay YDT – China Mobile, China Telecom, and China Unicom – would require Business Tax invoices in order to avoid being taxed on monies paid out.  For YDT to generate a Business Tax invoice, it would need to pay the tax to the Tax Bureau, which would cause it to show up in YDT’s financials"

Is there a way to easily prove that MW is wrong here?

Thanks for the link.  Toro looks to be the authority on this.  Do we know what the time line is from the special committee?  Should we expect an accelerated buy back 48 hours after earnings? Will NQ wait till investor day on the 19th to make an announcement? Do the members of the board have any history of large corporate actions?