Seems everyone lost confidence in NQ because of FL deal, do you forget Yahoo and Ali?

[gaosl11]

In order to get Alibaba public, Yahoo sold its 20% Alibaba stake to Baba for 4 billion. Yahoo stock is also staying around 20 at that time. Today Yahoo's remaining 20% Alibaba stake is worthing 50 billion, and pushed its stock to 50. The reason that Yahoo sold 20% stock to get Alibaba public will never be understood by most US investors, but it's still not a bad deal.

I'm mad at FL deal but Omar and Matt are not idiots, they might have some reason that's hard to share with investors. So maybe we should wait and see how this turns out in the end.

[eddielee]

Tack Fiori rough figures outlined in HKD

Net Worth：around 120 million HKD mainly cash plus newly aquired child English education company

Book Value / share：120 million HKD / 2 billion share = around 5 cent in HKD

Let us generously give it a P/B of 10 considering that newly aquired education business seems very profitable and growing, that arrives at a stock price of 50 cents HKD, or market cap 1 billion. HOW COME now traded 2.3-2.5 HKD a share and maket cap over 5 billion? Someone educate me?

Really some hands pumping it up lately?  Even for reverse merger, why can NQ NOT pick another more reasonably priced shell? Even FL deal goes through and investors OK with its valuation at 570-630million USD, the weighed share price could go lower later on, because recall that FL makes about 60% of the new company and the rest 40% business is worth only 5-50 cents HKD per share

Pls educate me.

[tradestar2012]

you need to account for the 30 day average price and then further reduce the price by 10-20% to get to the exchange price between Tack Fiori and FL. Still over priced, but given my understanding of reverse mergers in HK (which I admit is limited) there are certain specific rules the combination needs to fulfill in order to pass regulator requirements. Tack Fiori seems to fulfill some, but not all the rules as I understand them. Obviously, NQ's legal team would have a better grasp on how to spin FL out. Anyhow, the company was always going to spin the assets out. An IPO was not likely given most banks stay away from battleground stocks with negative rumors surrounding it. The only other option to go public would be a reverse merger. The problem is the timing, not the reverse merger. The company needs to do a buyback first. Assuming they do a material buyback, that buys them a lot of patience and forgiveness by investors to do more long term corporate actions.

[gaosl11]

Tack Fiori rough figures outlined in HKD

Net Worth：around 120 million HKD mainly cash plus newly aquired child English education company

Book Value / share：120 million HKD / 2 billion share = around 5 cent in HKD

Let us generously give it a P/B of 10 considering that newly aquired education business seems very profitable and growing, that arrives at a stock price of 50 cents HKD, or market cap 1 billion. HOW COME now traded 2.3-2.5 HKD a share and maket cap over 5 billion? Someone educate me?

Really some hands pumping it up lately?  Even for reverse merger, why can NQ NOT pick another more reasonably priced shell? Even FL deal goes through and investors OK with its valuation at 570-630million USD, the weighed share price could go lower later on, because recall that FL makes about 60% of the new company and the rest 40% business is worth only 5-50 cents HKD per share

Pls educate me.

we are same here.  I'm just saying Yahoo also sold Alibaba shares for ridiculous low price ( 4 billion versus 50 billion today) in order to get Alibaba list in the stock market and it turns out better than most expected.

[nani4215]

Just wondering - If Tack Fiori is so overpriced, why was that stock not been attacked by shorts till now? Something is going on which we might not aware of. I don't think NQ is so dumb in selecting Tack for RM. They clearly mentioned that they wanted to reduce the costs involved in taking FL public.

On a side note, I believe NQ and its businesses are legit. I am very disappointed like everyone when NQ didn't announce any buybacks, which are very important at this point of time to gain some credibility. May be they are trying to save some cash to acquire remaining of Showself and Yipai, which i believe necessary to achieve their $1B rev target.

Anyhow, I don't think either they will postpone/terminate this RM process(which i think they already started) OR comeback and announce any buybacks. Hope they announce a detailed PR and some good deals soon to stop this SP downfall.

[blackdog08]

On a side note, I believe NQ and its businesses are legit. I am very disappointed like everyone when NQ didn't announce any buybacks, which are very important at this point of time to gain some credibility. May be they are trying to save some cash to acquire remaining of Showself and Yipai, which i believe necessary to achieve their $1B rev target.

  The sad part is that there is no question in my mind that the business is legit.  The trouble I have is that up until the ER, I had been giving the NQ management all benefits of the doubt on the delayed 20F because they were not in full control of getting that done.  But, choosing to do RM without keeping their repeated promises to do buyback is clearly by choice.   Also, looking at the picture, what is a better company to invest in than a collective of their own sub's which are themselves  Speaking of Yipai and Showself, the owners got paid with restricted shares of about 34MM and 30MM ADS each in May when the avg price was around $9.4, it is hard to imagine that they wish to discuss selling the rest of the co's to NQ given what they and other shareholders have witnessed.  Of course, I based that assumption on that there was no side deals other than what was disclosed in the filing.

[eddielee]

By any measure, TF appears to me too pricy now.

If new company share drops below 1.4 HKD exchange price in post-merger, FL's valuation will be shattered. And people will say ' hey, that makes perfect sense, its parent company has a market cap of $300 million only, how could this subsidiary ......'.   While going south of 1.4 HKD is highly likely given its 5-50 cents worth.

Some reason hard to share? Something going on which we might not aware of? That is the scary part, the unexplanable.

So how likely they put ' up to'  $80 million buyback promise into action? For the $35 million announced earlier, any portion done on that? did they disclose, do we know? Bake a fresh promise so the older one can be forgotten. And did not they just mention buyback blackout due to FL transsction?

And why start to monetize new business not until 2015? Are aquired sectors P/L not consolidated right away? If they are already bringing revenues, why wait till 2015?

[gaosl11]

By any measure, TF appears to me too pricy now.

If new company share drops below 1.4 HKD exchange price in post-merger, FL's valuation will be shattered. And people will say hey, that makes perfect sense, its parent company has a market cap of $300 million only, how could this subsidiary ......While going south of 1.4 HKD is highly likely given its 5-50 cents worth.

Some reason hard to share? Something going on which we might not aware of? That is the scary part, the unexplanable.

So how likely they put up to  $80 million buyback promise into action? For the $35 million announced earlier, any portion done on that? did they disclose, do we know? Bake a fresh promise so the older one can be forgotten. And did not they just mention buyback blackout due to FL transsction?

And why start to monetize new business not until 2015? Are aquired sectors P/L not consolidated right away? If they are already bringing revenues, why wait till 2015?

just to answer your question. For previous announced 35 million BB, they did purchase around 4 million per quarter for about 3 quarters since they annonce(2013Q3). So that's around 12 million buy back of stock with average price 10 ~11 per share. you can find all those details in NQ ER

For acquired business, those P/L should already be included in the report. they just not that significant. What NQ means is those are early business and only bring traffic(e.g. 2 million MAU for showself which grow 5X this year) so far which they plan to monetize in 2015

[eddielee]

Gao, thanks for the diligent research.

I am not particularly impressed with Showself or Yipai. Vlife and MusicRadar (Doreso) seem to me better hope. Do they bring insignificant revenues too? Been peddling them for more than a year, they are known already preinstalled on many devices. If that still generates no noticeable revenue, hard to be convinced monetization will be sizable in 2015, if any. As MusicRadar adopted by Samsung, Shazam is for IOS. The latter has a valuation of $500 million. The comparison makes me dismal.

[nani4215]

Tack Fiori:

current market cap: $665 mil USD.

Net assets : $18 mil USD.

Net income for last year:  - 14 mil USD  (Loss)

http://finance.yahoo.com/q/is?s=0928.HK+Income+Statement&annual

http://finance.yahoo.com/q/bs?s=0928.HK+Balance+Sheet&annual

Clearly, this is just a shell. They are done with their appareal business and hence decided to sell themselves. No one has an idea why its market cap is $665m USD. Clearly, SP of this company has been manipulated in last few months so that its current market cap is just above the FL valuation($570-$630). Is it done by NQ and Tack Fiori to avoid some taxes or something (LEGALLY)? Absolutely no idea. But, I believe NQ has already started with this RM process few months back itself. They just waited and informed us during quartery results.

By the way, what are shorts doing when Tack Fiori SP skyrocketted to $2.28 HKD in last one year itself. Why are they not shortting this stock? I don't think they somehow overlooked this stock. May be all the stocks are with management and they purposefully joined NQ to raise the market cap to $665m USD.

During conf call, when someone asked why NQ is merging with an appareal business company, NQ clearly told it doesn't matter what their business is. I believe NQ knows what they are doing. They don't make a fradulent transaction. Even if they do, they won't do it this publicly.

How much FL mobile will own after this RM?  70% or 80% or 90% ?? Absolutely no idea. I guess somewhere between 85-90%. Because, NQ opted this RM process as it is cost effective and clearly they wanted to reduce their IPO expenses. I don't think it will give away 20-30% to Tack Fiori for being a shell company. That is way too high. Again, absolutely no idea what NQ's plan is.

I trust NQ and all its businesses/products seems to be very legit to me. Like most of us here, I am too very dissapointed with management. Particularly they failed very badly in unlocking SP value. Only think thats keeping me positive is its businesses/products and their rapid growth.

Hope they close this FL deal very soon and I wish FL own 85-90% of the compnay after RM. Good luck.