NQ Mobile: Capital Ventures, Sequoia Capital China Disclose Stakes


Venture capital firms are taking an interest in NQ Mobile Inc (ADR) (NYSE:NQ). A pair of regulatory filings released today show that as of the end of December, two firms had stakes of reportable sizes.

Firms report NQ Mobile stakes

Capital Ventures International, which is grouped together with a number of Susquehanna International Group’s arms, reported owning nearly 2 million shares of NQ Mobile Inc (ADR) (NYSE:NQ) via a filing with the Securities and Exchange Commission. That represented a 6.3% stake in the controversial Chinese company which Muddy Waters claims is a fraud. The SEC filing for Sequoia Capital China reported that it and its affiliates held a 3.5% stake.

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Big move in NQ Mobile could be ahead

Topeka Capital Markets analyst Frederick Ziegel sees a couple of things happening which could result in a significant share move for NQ Mobile Inc (ADR) (NYSE:NQ). He continues to rate the company’s stock as a Buy with a $36.75 per share price target. He notes that we’re still waiting for the results from the independent firms which have been reviewing NQ. He expects that review to be completed over the next month or two.

He also reports “significant activity on the shareholder front,” which he thinks will result in some major moves around the time that those results are announced. Of course it depends entirely on what that report says. However, at this point it looks like most analysts are siding with NQ Mobile Inc (ADR) (NYSE:NQ) rather than Muddy Waters. The stock rose significantly recently after Morgan Stanley disclosed a stake in the Chinese company.

NQ Mobile Inc (ADR) (NYSE:NQ) shares have been performing quite well since the company recovered from Muddy Waters’ short thesis. Shares have risen 16% so far this year, compared to the Russell 2,000, which is down 4%, and the NASDAQ, which is down 1%.