Market Overview

NQ Mobile Shares Surge +25% Following Strong Guidance, FL Mobile Sale


Shares of NQ Mobile (NYSE: NQ) Friday have soared as high as 29 percent following the company's announcement of updated revenue for the first quarter, initial guidance for the second quarter and its definitive agreement to sell a minority interest.

Updated Q1 Revenue

NQ Mobile's management revised expected first quarter 2014 net revenues to exceed the previous range of $75-$76 million. This is an increase of over 125 percent from the same period last year. The company highlighted continued strength in it business, especially the enterprise segment.

Q2 Guidance

Management provided initial net revenue outlook for 2014. Due to solid business trends and financial visibility, NQ Mobile sees net revenue to come in within $83 million and $84 million, versus the $41.4 million in the second quarter 2013.

In the press release, co-Founder and co-CEO of NQ Mobile Dr. Henry Lin said, “We remain diligently focused and confident in our business, our strategy, and our future. With our preliminary Q1 expectations exceeding our previously issued guidance and the continued strength of our businesses demonstrated by our strong second quarter guidance, we remain excited about our trajectory and opportunities to continue to grow our business in 2014. Our employees have done a remarkable job staying focused and delivering results during a period of distractions.”

Sale of FL Mobile

Following the company's guidance report, management issued a statement announcing that NQ Mobile has entered into a definitive agreement to sell its minority interest in the wholly owned subsidiary, FL Mobile.

The company has signed an agreement to sell 5.88 percent of FL Mobile, or up to a total of $25 million. The $25 million deal consists of $15 million to Bison Mobile Limited and $10 million from other investors, “at a pre-money valuation of $400 million dollars or post-money valuation of $425 million.”

NQ Mobile will use the funds to “further expand and enhance the FL Mobile business, brand and content.”

Stock Action

Shares of NQ Mobile hit a new 52-week low on Thursday at $6.25. The stock is currently around $7.97, up 16.3 percent from Thursday's close.

Posted-In: Dr. Henry Lin FL MobileNews Guidance Asset Sales Management


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