Als NQ Mobile inderdaad een frauduleus bedrijf is, dan hebben ze dat in ieder geval erg slim gedaan.
Muddy Waters heeft een van de grootste Chinese fraude-bedrijven Sino-Forest (waar zeer John Paulson 750 miljoen had ingestoken) ontmaskerd.
MW heeft zeer grote deskundigheid op het gebied van Chinese fraude, ze gaan b.v. zelfs langs bij kantoren en fabrieken om te kijken wat daar gebeurt.
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Yet, according to Muddy Waters, this is all a hoax. Their market share in China is probably closer to 1.5%, compared to the 55% NQ reports, while their paying user base probably totals 250,000, compared to the 6 million the company claimed.
Their purported international revenue, of $36.5 million “is likely less real than its [China] revenue,” and probably closer to $1 million. “NQ claims to generate international revenue in obscure markets, and through mysterious counterparties that seem to seldom pay,” the report read.
The company released a statement saying it takes any “false allegations [...] extremely serious” and pledged to “respond quickly, transparently and forcefully.” They expect to issue a more detailed response before the market open on Friday.
Muddy Waters calls NQ’s future “as bleak as its past” and claims the company’s intention to transition into gaming and advertising “merely an attempt to prolong the fraud.” The company, which only a few days ago priced an offering of $150 million of convertible senior notes, was also looking to compete with Baidu and Qihoo 360 in search and ads.
They call NQ’s management “sloppy, to the point of being comical, fraudsters.” And go further:
The one intelligent move NQ made to further its fraud is putting in place the veneer of US management – particularly “Co-CEO” Omar Khan. Were Mr. Khan not fronting for NQ, we do not think that investors would have been so willing to overlook so many red flags. It is unclear what Mr. Khan does and does not know; however, he is not a member of the boards or management of any of NQ’s China entities. It is clear that his stock package is worth close to $100 million, which is likely far more than he would have earned as a non-C level manager at Citigroup.