As we head into the third quarter earnings release for NQ Mobile “NQ”, or the “Company” on Tuesday, 11/12/13, we wanted to take a brief break from our due diligence DD in China to remind investors of where things stand with the allegations that Muddy Waters “MW” issued about NQ two weeks ago.If you recall, MW spewed several exceedingly bold allegations in their latest hit job on their way to declaring NQ a “zero.” Let us list them so we can grade them:
- NQ has no cash
- Payment Service Provider “SP” Yidatong “YDT” does not exist, not even physically, because it is NQ
- YDT manufactures most of NQ’s revenue by roundtripping cash because YDT’s SAIC financials don’t add up per MW GAAP
- NQ has no real partners in China
- NQ has practically no users in China
- NQ’s software basically sucks and nobody wants to use it
Although MW will not get too many Christmas cards from NQ this year, the self-proclaimed short sellers extraordinaire with the 0-7 track record of uncovering fraud in IPO’d companies did manage to get an open invitation to visit NQ’s headquarters in Dallas and Beijing. There, NQ is willing to open all its books for MW to examine. Incidentally, our good friends at CNBC reminded us that we missed Standard Chartered, so perhaps MW is actually 0-8, but who’s counting?