Muddy Waters Slams NQ Mobile And Shares Plummet
Muddy Waters investment group has released a report on China based NQ Mobile (ADR) (NYSE:NQ) and it is anything but friendly. The report calls the company a fraud and warns that its products are unsafe for sale to the public.
The report from Muddy Waters claims that 72% of the revenue reported by NQ Mobile in 2012 is completely fictitious. According to the analysts the largest customer of NQ is the company itself. The research indicates that NQ Mobile (ADR) (NYSE:NQ) only holds a market share of 1.5% versus the 55% the company claims to hold.
The products offered by the company include the Antivirus 7.0, which Muddy Waters claims is not safe for consumers to use. The report calls it spyware and claims it makes users’ phones easily breached by cyber attacks. The data belonging to the users is only provided minimal protection as it is uploaded through the government firewall to the server at NQ. This analysis was performed by high quality security software engineers that were hired by Muddy Waters.
Muddy Waters also states that the international revenue that is claimed by NQ is most likely even more made up than its domestic figures are. The company claims assets in out of the way locations with clients who rarely make payments. Most likely the acquisitions of the company are fraudulent and the analysts believe that the deposits shown by the company are forgeries.
You can read the entire 81 page report issued by Muddy Waters below courtesy of ValueWalk.
It would seem that investors wishing to cover their proverbial backsides would be selling off any stock in this company while they can. The stock is currently down $10.79 to $12.09 per share. This is a 47.16% decrease from its opening price this morning.
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