1. FL mobile is going to IPO in next 12 month. considering PWC is always auditor for NQ which includes FL by now, it makes perfect sense that FL mobile still use PWC as auditor. if all rumors are true, then why PWC continue hold off signing annual report without any fraud found so far, do they dislike new business or they think their hold off won't hurt their relationship with NQ?

2. FL mobile's deal values FL mobile as 400 million as of today before selling minority ownership. Once it's IPO, the value will be more than 500 million+ in order to make investor profitable. The price is based on recent ChuKong technology failing IPO. they have a bit higher market share than FL mobile (13% vs 15%) and they withdraw their IPO because they think 560 million value assessment of them in the IPO is too low.

3. NQ would have new income cashflow of 25 million. although they said they will use it for FL mobile, that also means they will have more cash at hand. would they announce new buy back or at least finish current buy back as soon as possible?

4. NQ management should clearly know that those news, although great, are not what investors expected. Even they release a PR just like 4/30 saying no fraud found so far might bring stock more. So why they release those news now, not after they finish audit first and announce those news to boost stock?

all in all i think NQ mobile is taking some bold movement under current environments. My wishful guess is that management is taking advantage of current market to buy back more stocks(which they need disclose any materialized information first) and there are still a lot of good deals to come after audit is come out cleanly. it would be interesting to see what will happen in the next 3 month.

'elvis00' pid='44083' datel Wrote:Doesn't it make more sense for Bison to pick up shares of $NQ which wholly owns FL Mobile and a bunch of other revenue streams? At that valuation how does this make sense for Bison?

they pick up shares of NQ doesn't make profit, and there is risk that price goes down again. However current deal indicates that they can take back investment back in 12 month if FL mobile not IPO successfully. that's zero risk for them now and at least 20% profit in one year if IPO is success.  in short, they don't want get control, they want return on investment

I see it differently. On a deal IRR basis, there is no question that $15 million would be better invested in shares of NQ than FL. If Bison is comfortable with FL, by association it would be comfortable with NQ. The redemption clause is nice, but ppl invest to make money, not not losing money. At today's closing price of $7.6/shr, NQ's mkt. cap is $456 mil, subtracting $100 mil of net cash, you get an enterprise value of $356 mil, much lower than the $425 mil post money valuation of NQ. Pretty clear to see which one would be a better investment.

Why does Bison do this? In a word, partnership. Well, if you look at Bison's company intro., it sees itself "As a flexible and value-added partner, Bison Capital provides a full spectrum of financial, strategic and operating resources." So, Bison operates a lot like a private equity firm as opposed to a hedge fund. If you look at its portfolio companies past investments, they are mostly US based and "old economy". My hunch is that Bison wants to get into "new economy(tech)" and wants in on China. By doing this deal with NQ, they are still going to make money, maybe not as much money in the short term, but they gained a valuable and very grateful partner. Clearly this deal helps NQ to underscore the value of its assets at a very critical juncture, whereas buying $15 mil worth of stock doesn't really serve NQ in any way shape or form(Bison isn't Buffet) I can see Bison co-investing with NQ in future deals, or NQ may introduce Bison to other entrepreneurs. What Bison give up in short term profits, they'll more than make up with future deals/relationships. Bison thinking long term would be my guess, and a pretty smart decision.

'gaosl11' pid='44082' datel Wrote:

1. FL mobile is going to IPO in next 12 month. considering PWC is always auditor for NQ which includes FL by now, it makes perfect sense that FL mobile still use PWC as auditor. if all rumors are true, then why PWC continue hold off signing annual report without any fraud found so far, do they dislike new business or they think their hold off won't hurt their relationship with NQ?

2. FL mobile's deal values FL mobile as 400 million as of today before selling minority ownership. Once it's IPO, the value will be more than 500 million+ in order to make investor profitable. The price is based on recent ChuKong technology failing IPO. they have a bit higher market share than FL mobile (13% vs 15%) and they withdraw their IPO because they think 560 million value assessment of them in the IPO is too low.

3. NQ would have new income cashflow of 25 million. although they said they will use it for FL mobile, that also means they will have more cash at hand. would they announce new buy back or at least finish current buy back as soon as possible?

4. NQ management should clearly know that those news, although great, are not what investors expected. Even they release a PR just like 4/30 saying no fraud found so far might bring stock more. So why they release those news now, not after they finish audit first and announce those news to boost stock?

all in all i think NQ mobile is taking some bold movement under current environments. My wishful guess is that management is taking advantage of current market to buy back more stocks(which they need disclose any materialized information first) and there are still a lot of good deals to come after audit is come out cleanly. it would be interesting to see what will happen in the next 3 month.

You bring some good points here.

1. PwC China is under revenue pressure currently. They are always looking for new business. So, PwC China should welcome FL business. This is not the reason PwC hold off signing annual report.

2. No comment.

3. Your guess has a right direction. You will see it after 20F or IC release.

4. Management clearly know what the investor wants. Thoes news were just part of whole plan today. But the whole plan couldn't be fully executed. That is why someone in Stocktwits said Chinese CEO along with other management were in a conderence room at the Dallas headquater dealing with PwC.

(05-31-2014, 11:45 AM)js253 Wrote:

I see it differently. On a deal IRR basis, there is no question that $15 million would be better invested in shares of NQ than FL. If Bison is comfortable with FL, by association it would be comfortable with NQ. The redemption clause is nice, but ppl invest to make money, not not losing money. At today's closing price of $7.6/shr, NQ's mkt. cap is $456 mil, subtracting $100 mil of net cash, you get an enterprise value of $356 mil, much lower than the $425 mil post money valuation of NQ. Pretty clear to see which one would be a better investment.

Why does Bison do this? In a word, partnership. Well, if you look at Bison's company intro., it sees itself "As a flexible and value-added partner, Bison Capital provides a full spectrum of financial, strategic and operating resources." So, Bison operates a lot like a private equity firm as opposed to a hedge fund. If you look at its portfolio companies past investments, they are mostly US based and "old economy". My hunch is that Bison wants to get into "new economy(tech)" and wants in on China. By doing this deal with NQ, they are still going to make money, maybe not as much money in the short term, but they gained a valuable and very grateful partner. Clearly this deal helps NQ to underscore the value of its assets at a very critical juncture, whereas buying $15 mil worth of stock doesn't really serve NQ in any way shape or form(Bison isn't Buffet) I can see Bison co-investing with NQ in future deals, or NQ may introduce Bison to other entrepreneurs. What Bison give up in short term profits, they'll more than make up with future deals/relationships. Bison thinking long term would be my guess, and a pretty smart decision.

I think it would be difficult for FL Mobile to IPO in the US in the next 12 months. So trying to list in Hong Kong seems like a strong possiblity.

'tradestar2012' pid='44091' datel Wrote:2. ChuKong's failed IPO has nothing to do with FL's valuation today or in 12 months. IPO windows open and close all the time. Chinese stocks recently took a nosedive, thus closing ChuKong's window. I personally do not think FL will be spun out into an IPO, but thats just my humble opinion. 3. The sale of FL equity has nothing to do with a buyback or future buybacks. The company has 283M in cash on the balance sheet. $25M more is not going to change anything. 4. Today's announcement was to stop the bleed from the short attacks by setting a floor. 3rd party valuing FL provides other investors insight on NQ's business lines and signals to investors that parts of NQ are in play to be sold/invested into or partnered with.

So do you think Bison and the other investors in FL Mobile would excericse their redemption rights sometime after a year from now and get their money back?

If you there is no plan for NQ to spinoff FL Mobile, wouldn't that mean this investment is just NQ asking some venture capital friends to make a money back guaranteed investment in FL Mobile right now to help support NQ's stock price?

who knows. who cares. redemption rights rarely get exercised. If the value of FL increases, and the market receptivity for IPOs is not there, will investors settle for the redemption right value or wait it out? We also do not know what the redemption terms are. Is it par or some multiple of revenue or ebitda? Is there a finite amount of time they have to exercise that right? Who knows. We'll find out once the 20f is issued as they usually inlcude deal terms in the schedules. As it stands, FL being ready to IPO in 12 months is a very agressive timeline. In my opinion of course. The Bison investors and other investors may have a different opinion, and thats fine. I just dont share it. Not really a big deal.

w/re to money back guarantee? huh? I'm not sure where you get that idea. theres no money back anything in an investment. If NQ  is a sham, then Bison and investors are SOL. What this deal signifies is the legitimacy of FL and the floor valuation of NQ as being FL ($425)+ Net cash of $110M or so = 535M or ~$9/sh. That value dos not include any value for Nationsky or the legacy antivirus business. Noone is contesting the validity of Nationsky, so i'd be curious to see if there are other plans in the works to continue unlocking value and getting the street to recognize NQ on a sum or the parts basis.

quote='thecrazykevy' pid='44093' dateline='1401519224']

So do you think Bison and the other investors in FL Mobile would excericse their redemption rights sometime after a year from now and get their money back?

If you there is no plan for NQ to spinoff FL Mobile, wouldn't that mean this investment is just NQ asking some venture capital friends to make a money back guaranteed investment in FL Mobile right now to help support NQ's stock price?

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