We suppose they were waiting for a bad report out of Deloitte and Shearman, then covered and got squeezed upon the news that Morgan Stanley had joined us in becoming a top holder, then covered and got squeezed again upon the news that Sprint is going to be the US deployment partner for NQ Live, then came back in full force on the news that China and the US are feuding over accounting disclosure laws. The SEC vs. the Big 4 issue is a total red herring at this point. It will get resolved over the course of years, not months, and this move by an overzealous and frustrated judge was way over his pay grade: it is inconsequential. The issue will get resolved by much higher powers than a puny pawn in the legal system.

Cooperation between China and the US is slow, but steady, as it has been now for about two years. Yesterday, we saw another sign that things are progressing as expected: .http://reut.rs/1i6IEKa

Anyone betting against Chinese ADRs due to this long-dated dispute between two governments that is slowly but surely getting resolved is also betting against large US multinationals that would get affected by any fallout: MacDonalds, Nike, Yum Brands, Microsoft, etc. In other words, absolutely nothing will happen to the Big 4's ability to audit ADR issuers this year and likely next, and by the time the dispute gets resolved, which could be years, nobody will even remember it's an issue because equity prices won't be reflecting it at all.

As for NQ, we expect a surge of good news once the internal investigation is completed, which we expect to happen in a matter of weeks (sometime in February seems likely given our past experience with these types of full financial audits). We believe (but don't know, of course) that the company is either unable (since they may be in possession of non-public information at this point in the investigation) or unwilling (since they may want to wait for a more opportune time, i.e. post-audit) to announce shareholder-friendly news until after the audit. The buyback, for example, has not been completed despite having been started post-MW, and a new one has not been announced. That's curious, and it indicates to us that something (likely some new information) got in the way of its completion. The founders, who have now been granted the ability to pledge their shares to take out cash loans, have not done anything personally, despite now having the ability to deploy their own capital. We wonder for what reason they wanted to pledge their shares for cash loans in the first place, and for which uses any reasonable lender would issue share-backed loans to the founders of a company accused of wrongdoing, unless, of course, the use is to buy back shares (this is not rocket science, though we are, of course speculating now).

We also wonder why there are so many rumors in Beijing about strategic interest in NQ right after the MW hit, some documented by the local media (here: http://bit.ly/1cHFI2L and here: http://bit.ly/12oUwy4), that have been affirmed by credible sources (such as heads of top private equity or venture capital firms, corp dev/strategy execs at top Internet companies, etc.). NQ itself has affirmed strategic interest in past conference calls. And in an environment where mobile assets are the new battleground for China's Big 4 Internet companies, with lesser companies, such as GOMO, have taken investments from the Chinese "Big 4" Internet platform companies very recently (QIHU was the strategic investor in GOMO)... we wonder if NQ can continue to demur all the confirmed interest given its desire to regain full credibility with investors and the fact that so much of the "weak money" in the stock has fled and is willing to sell. We would not be surprised at all if a large strategic disclosed a large stake in NQ sometime soon.

That's a long-winded way of saying that we can only speculate why the shorts are still clinging on, but we are very confident that they are in for the same fate of the copycat shorts of the past seven or so MW hits: sudden, sharp losses.

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