Muddy Waters starts with a strong SELL

[pwalk]

Man, these shorts do not give up.  I got stopped out, looking for a point to re-enter.  Anybody seen the report?

[GraniteGrab]

I am looking for any report...crazy volume and decline today. I have a bunch of puts sold for this month...very very strange

Man, these shorts do not give up.  I got stopped out, looking for a point to re-enter.  Anybody seen the report?

[admin]

NQ Mobile crashes as Muddy Waters calls company a "massive fraud' • 1:19 PM

• 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."

[admin]

It is fairly difficult to imagine that with partnerships with the likes of America Movil there is much into this, but it's sell first, ask questions later..

[GraniteGrab]

Admin..do you have any other thougts to this...?  very strange

It is fairly difficult to imagine that with partnerships with the likes of America Movil there is much into this, but it's sell first, ask questions later..

[admin]

All bets are off for me. They have serious research following and partners who have done serious DD, but that recent bond offering makes me a little uncomfortable under the present circumstances, enough to stay on the sidelines until the smoke clears.