dpetrescu Posted July 4, 2014 Share Posted July 4, 2014 Off-topic from value investing but has anyone been following the ongoing saga with NQ Mobile? It was down 30% Thursday on announcement audit chair/board member left for personal reasons. I have a very tiny put position but have been following this more out of interest and to learn about fraud. The company in October 2013 was accused by Muddy Waters of fraud with high publicity. However, it was really J Capital, based in China (The woman cofounder often writes for the economist and FT) were the ones to first accuse the company of fraud with a report back in 2012. So far nothing is yet certain if they did commit fraud. NQ Completed an "internal" Audit in June that did not find any wrongdoing but missed the deadline to release its yearly audited report. It is interesting what happened afterwards. They announced that a couple third parties purchased ~1% of two separate subsidiaries, at a price that implies a valuation 10x higher than what NQ paid of for the acquisitions just a year ago. This was highly suspicious. (NQ is a "platform" company so they make a lot of acquisitions). On Wednesday, NQ was up 10% on rumors over Twitter that the audited yearly report was about to be released. The next day, on a low volume day before July 4, they released the announcement. The director share sale lockout is soon about to expire. Link to comment Share on other sites More sharing options...
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