NQ mobile actual bank deposites

NQ Mobile Issues 90 Page Response To Muddy Waters

Muddy Waters’ allegation regarding NQ Mobile Inc (ADR) (NYSE:NQ) that its China revenue is fraudulent, here is NQ’s response.

NQ Mobile’s cash holdings are fabricated and falsified

  • NQ CASH HOLDINGS ARE REAL. CASH is the ultimate determinate of the health of a business and is the yardstick by which any business can be measured.
  • NQ has made public all of its bank account holdings, bank names, account numbers, and balances.
  • NQ will immediately take steps to obtain an independent validation of NQ CASH holdings.
  • NQ has a very strong balance sheet and will show details of its cash position to anyone wishing to do additional diligence.

NQ Mobile Inc (ADR) (NYSE:NQ) holds approximately US$280M in term deposits including ~US166M from the recent CB offering proceeds. Other cash accounts exist at various operating entities.

NQ mobile Muddy waters

  • The following are actual scanned copies of NQ Mobile Inc (ADR) (NYSE:NQ)’s actual bank deposit receipts and bank statement from the recent convertible bond offering proceeds.

NQ mobile actual bank deposites

Level 2 classification of NQ cash holdings is suspicious

  • Classification of cash and term deposits as Level 2 assets is consistent with US GAAP guidance of fair value measurement.
  • Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
  • Level 2 – other inputs that are directly or indirectly observable in the marketplace.
  • Level 3 – unobservable inputs which are supported by little or no market activity.
  • NQ Mobile Inc (ADR) (NYSE:NQ), based on this guidance, reclassified its cash and cash equivalents and term deposits from level 1 to level 2 in 2012 consistent with US GAAP. This approach had been adopted in 2011 so 2012 was the first year these rules would have been applied so the reclassification was warranted. This was clearly explained in the 2011 20F and did not change anything related to liquidity or operational efficiency.
  • For expert opinion on Level 2 cash classification and specifically China Accounting standards, please see the following post by Paul Gillis, an accounting professor at Peking University’s Guanghua School of Management.

NQ Mobile responds to Muddy Waters


Saved Articles

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted & limited time offer for being a sophisticated and loyal reader.

ValueWalkPremium is a website and newsletter on the latest industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today and get our exclusive content for 40% off. This is our second biggest discount ever!!

Use coupon code VIP20 or click on the button below

Limited time offer only ENDS 2/29/2019 or after next 25 subscribers take advantage whichever comes first – please do not share this discount with others