NQ Mobile Inc (ADR) (NYSE:NQ) stock continues to fall on allegations that the company has exaggerated its revenues and misled investors, but some analysts are unmoved and think this is a good opportunity to buy. Analysts from Topeka Capital Markets and Canaccord Genuity have maintained their price targets and Buy ratings based on what they think is a solid response from NQ.

NQ Mobile

NQ Mobile conference call

“NQ Mobile Inc (ADR) (NYSE:NQ) conducted a very lengthy conference call this morning to address the assertions made in a report published by Muddy Waters,” wrote Topeka Capital’s Frederick Ziegal. He acknowledges that the report will probably depress prices in the short term, but he thinks that ultimately the issue will be resolved and has maintained a $33.50 price target.

Canaccord Genuity analysts T. Michael Walkley, Matthew Ramsay, and Siddharth Sinha are only slightly less optimistic, with a price target of $29, but they also see reason to trust NQ Mobile Inc (ADR) (NYSE:NQ).

“NQ provided a detailed response to these allegations,” they wrote. “NQ Mobile Inc (ADR) (NYSE:NQ) also announced the formation of a special committee comprised of four independent board members who have the authorization to retain independent advisors to conduct an independent review of the allegations.”

They also point out that PricewaterhouseCoopers is the firm’s auditor and that due diligence was performed ahead of an October 16 bond transaction.

Stock’s decline rate

Neither group of analysts is addressing the allegations directly, but they feel like a company with something to hide wouldn’t have brought in a major accounting firm to check out their books or assign independent advisors to investigate Block’s claims. Basically, they aren’t acting guilty. Considering the speed at which NQ Mobile Inc (ADR) (NYSE:NQ)’s stock fell, few if any investors had the time to really check out Block’s allegations before selling, and simply chose to trust Block’s reputation. Of course Block isn’t disinterested – he openly shorted the company before coming out with the report – but that doesn’t mean he’s wrong. His short on American Towers didn’t pan out, but he has a strong record of identifying companies with serious problems, and then revealing those problems to the public once his shorts are in place.

For anyone who still has a position in NQ Mobile Inc (ADR) (NYSE:NQ), the stock price is probably an all or nothing proposition. Either its revenues are fictitious as Block says and the shares become worthless, or they’re not and the price rebounds completely in the next year.