NQ Mobile Inc (ADR) (NYSE:NQ) dropped 8% to $5.86 per American Depositary Receipts, to hit an all-time low Friday, with investors still awaiting the company’s next financial report.However, it recovered over 3% in the early morning trading today.

NQ Mobile

NQ Mobile Inc (ADR) (NYSE:NQ)’s share price slide continued since May when it said it needed more time to file its annual report.

Muddy Waters’ accusation

Muddy Waters targeted the Chinese mobile internet service provider in October accusing the company of fraudulent accounting practices. Interestingly it is nearly 60 days since the Chinese company originally said it would release its annual report. The company has provided no real reason for delaying the report. The longer the mobile internet service provider goes without releasing that report, the more hot water it could find itself in.

Commenting on the delay, a Seeking Alpha contributor said the delay could only be because there is something going behind the scenes.

The Chinese company’s shares led decline among ADRs for Asian companies on Friday, after the region’s markets fell.

NQ Mobile in the grip of short-sellers

Though short-seller Muddy Waters made unproven accusations of fraud concerning the Chinese company in October, the company recently said that an investigation it found no evidence. Moreover, over half the company’s shares are held by short-sellers. According to NASDAQ, short sellers hold about 14.4 million of NQ Mobile Inc (ADR) (NYSE:NQ)’s 136 million shares outstanding.

Interestingly, NQ Mobile’s shares spiked in mid-May before falling to a new low last week.

The Chinese mobile internet service provider in its regulatory filings said it was not able to file its annual report on time because it is investigating the allegations made by Block and his firm. The company added that it will file its report for the year that ended Dec. 31, 2013 “as soon as possible.”

The company recently released the findings of its internal investigation of its accounting practices showing that no evidence was found that it had committed fraud. However, Muddy Waters’ Carson Block argued that management and staff of the company were unable to provide a credible explanation regarding the investigation team’s observation that ‘there was data significant tampering’.