NQ Mobile Inc (ADR) (NYSE:NQ) stock took a dive after a tweet apparently posted by Xinhua English News (since taken down, h/t QtR at SeekingAlpha) that PricewaterhouseCoopers had resigned as the embattled Chinese tech company’s auditor. The stock price fell more than 5% to $7.74 before NQ Mobile denied the report. NQ Mobile supporters allege that the tweet was intended to harm the company’s stock price.

NQ Mobile

“PwC has not resigned,” NQ Mobile wrote in a statement that was more important than its brevity might imply.

Missing information has investors on edge

NQ Mobile Inc (ADR) (NYSE:NQ) has been the target of a short campaign by Carson Block at Muddy Waters since last year, when he accused the company of cooking its books. Block has had a lot of success shorting Chinese companies, though many of his past targets used reverse mergers to get listed in the West, a tactic that is prone to abuse because it sidesteps some of the regulatory hurdles that come with getting listed and holding an IPO, while NQ Mobile was listed through the normal IPO process.

NQ Mobile Inc (ADR) (NYSE:NQ) agreed to hold an independent investigation into its finances, and its stock price got a boost when a special committee made up of NQ Mobile board members, the law firm Shearman & Sterling LLP, and Deloitte & Touche Financial Advisroy Services Ltd. issued a report saying that there was no sign of fraud. But the stock has been losing ground since then as investors have realized that NQ Mobile may have interfered with the investigation. Block has said that because the independent committee hasn’t released details of the investigation, it’s impossible to know what information is missing and what that might mean for the company.

In that context, the resignation of PwC would have been a huge blow to NQ Mobile Inc’s (ADR) (NYSE:NQ) case, and the sell-off that ensued shows how nervous long investor are already. The stock price will likely drift back up now that the rumor has been addressed, but many people are upset that NQ Mobile wasn’t on top of the rumor within minutes (surely someone noticed the plummeting stock price?).

NQ Mobile evades questions about sale of minority stake in FL Mobile

In the same blog post NQ Mobile Inc (ADR) (NYSE:NQ) also said that its management team is aware that “the filing of our annual audit is the single most important focus for the marketplace and we are doing everything we can to finalize this as soon as practicable.”

The company also addressed the sale of a minority stake in its FL Mobile subsidiary, simply asserting that it is looking for new ways to unlock shareholder value and that it is also considering an IPO for FL Mobile in the next year. Such a vague explanation might not have sufficed if the company wasn’t under such harsh scrutiny, but it is certain to disappoint when people are already suspicious.

Correction: The original article incorrectly attributed the special committee report to PricewaterhouseCoopers. The article was also updated to specify that NQ Mobile went through a normal IPO process.