The Events That Took NQ Mobile Inc NQ Down Around 40% In 3 Days by Luke Jacobi, BenzingaShares of China’s NQ Mobile Inc ADR ( NQ) have been volatile following last week's 30 percent sell-off. On top of NQ Mobile's initial update, allegations have flown between between the Muddy Waters Research Group and NQ, with Wall Street rolling up its sleeves to get in on the action. NQ's First Update The biggest news lately is that PwC, who is conducting an audit of NQ's 2013 financials, "would need to perform additional procedures and expand the scope," of its work. NQ Mobile Inc ADR ( NQ) even said that it is "considering" fulfilling PwC's request. PwC's audit is what longs are depending on, as proof that NQ Mobile Inc ADR ( NQ) is, in fact, a legitimate business, despite Carson Block's of Muddy Waters attacks. In addition, the chairwoman of the audit committee announced she was stepping down from the board. Related: Barclays Sees Production Growth Possibilities For Memorial Resources Development NQ Mobile Inc. (NQ) Hedge Fund Reaction Adding to the bad news was word that hedge fund Altimeter had significantly cut its stake in the Chinese company. Altimeter had been the largest holder of NQ Mobile Inc ADR ( NQ) shares, owning 10.8 percent of the company, with the right to acquire an additional 0.4 percent. An amended 13G filing from Thursday showed that NQ's largest holder had liquidated its entire position, less the right to acquire 0.4 percent of the company. Muddy Waters' Reaction In response to NQ Mobile's update, Muddy Waters published comments on the report on Sunday. Specifically, it said, "NQ deliberately held back both admissions so that NQ China insiders and their proxies could illegally dump more shares at existing shareholders' expense."
In addition, Muddy Waters founder Carson Block claimed that "NQ is again misrepresenting the true state of its audit and relationship with PwC Zhongtian "PwC". NQ's prior statements and actions make clear that it has understood for some time that PwC will never issue an unqualified audit opinion for 2013.”“The language about PwC requesting a larger audit scope,” he added, “is a misrepresentation designed to keep the passengers on the sinking NQ ship so that NQ insiders can keep the lifeboats for themselves." NQ's Second Update NQ Mobile Inc ADR ( NQ) made a second announcement Monday in response to both Muddy Waters' attacks and new communication policies. The update apologizes several times for poor communication over the past several months and says NQ will be sure to provide its shareholders with more timely updates. A part of this is the "diligent" work being made on the completion of the 2013 audit. Regarding Carson Block's allegations, NQ Mobile said in a statement that "the allegations by Muddy Waters, various bloggers, and other short sellers are just flat out wrong. The Company continues to stand by confidently in our business, our strategy and in our financials and filings." Price Action Shares of NQ Mobile Inc ADR ( NQ) are down 37.6 percent since last Thursday's update to $4.22. The downward momentum has not stopped; shares have sold off an additional 5.8 percent late in Tuesday's session. The post Timeline: NQ Mobile Inc NQ Down Around 40% In 3 Days appeared first on ValueWalk. -By Benzinga