Carson Block Says $9.80 NQ Buyout Possible, Comments on Herbalife

Muddy Waters’ Carson Block weighed in on NQ Mobile’s NQ suspect acquisition offer and gave his opinion on Herbalife HLF during a segment on Bloomberg TV.

NQ Mobile

NQ Mobile reported a $9.80 per share takeover offer from China’s Bison Capital, a 42 percent premium over the previous day’s close. Much confusion arose about the legitimacy of the offer: shares traded more than 20 percent lower than the acquisition price.

Block emphasised that the stock is worth far less than $9.80, but it is hard to judge the Chinese fraud space. Block noted that many illegitimate offers have closed in the past and are often funded by state banks. This significantly elevates the risk of short selling NQ Mobile.

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Although he is still short the stock, Block commented that, “much stranger things have happened” in the realm of Chinese fraud than NQ Mobile being acquired for $9.80 per share.

He also stated that if the SEC does not deal with NQ Mobile now, the agency will have a major “headache” in several years as other fraudulent Chinese names spring up to take advantage of investors.

Herbalife

Block did not give an outright judgement on Herbalife, but stated insider selling and share buybacks are signs that the end may be near for the company.

When asked why he doesn't target big names, such as Herbalife, Block commented that Ackman has spent $50 million on research; an amount of resources he does not have access to.

NQ Mobile shares got a small boost following Carson Block’s session, but are still down 8.7 percent to $6.79. Herbalife was last trading three percent lower at $54.13.