NQ Mobile +30% Following Independent Committee Report; Muddy Waters Responds
One of the New York Stock Exchange’s most volatile stocks is once again making the biggest move of the day.
NQ Mobile (NYSE: NQ) depository shares are up more than 30 percent after the company announced that the special committee's independent investigation did not find any evidence of fraud. Before this announcement, shares of NQ were down 67 percent since Muddy Waters first attacked the firm eight months ago.
According to NQ, the committee, made up of Deloitte & Touche and Shearman & Sterling, did not find any wrongdoing by the company.
Specific Muddy Waters allegations the committee reviewed include NQ’s 2011 IPO, questionable cash flows and wrongdoings concerning acquisitions.
Highlights from the press release regarding the investigation are as follows: “The Company's acquisitions have contributed to increasing its revenues and user traffic... with regard to Yidatong in particular, the Company's revenues and cash flows from customers to carriers through Yidatong are verifiable and consistent with public disclosures”
The committee is also reported to have checked almost all account balances, cash transactions over $1 million and careful review of financial statements. The report implies the purpose of this due diligence is to confirm actual transactions are aligned with public records.
Muddy Waters' Carson Block responded to Benzinga, saying, "NQ Mobile is unequivocally a fraud. This press release is just another in a long line of whitewashes carried out by China companies that are defrauding U.S. investors, written by directors in China who have no accountability to U.S. authorities."
Shares up NQ Mobile were up nearly 33 percent in pre-market trading to $10.13. Nonetheless, shares are still down 56 percent since Muddy Waters first issued concerns.
Voice your opinion!
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.