Even though NQ Mobile Inc (ADR) (NYSE:NQ) is going through an independent investigation, analysts at Topeka Capital still like the Chinese company. They reiterated their Buy rating and $36.75 per share price target for NQ, saying it seems to them like the company is working to put that investigation to bed “favorably” so that investors are able to focus on its fourth quarter earnings. They believe the process will “unfold over the next few weeks.”
NQ Mobile gains ground back
Since notorious short-selling firm Muddy Waters began to cast doubt on NQ Mobile Inc (ADR) (NYSE:NQ)’s operations, the company has announced numerous mobile partnerships. Because of those partnerships, analysts like those at Topeka Capital haven’t lost faith in the company. Also shares have begun to recover what they lost after Muddy Waters announced its short thesis. The short seller claimed that up to 72% of NQ’s revenue was fraudulent and called the company “a massive fraud.”
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One of the more recent partnerships NQ Mobile Inc (ADR) (NYSE:NQ) has announced is the deal with Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930).
NQ Mobile defends against allegations
NQ Mobile Inc (ADR) (NYSE:NQ) has maintained that its accounting procedures are not fraudulent. The company reported in its previous earnings report that it had about 427 million registered users of its security software. Of that number, it reported that approximately 133 million of them are active every month.
In addition to NQ Mobile Inc (ADR) (NYSE:NQ)’s security software, the company also offers mobile games and other apps. The Chinese mobile app maker reported that it had 98 million mobile gaming users with approximately 19 million of them active every month.
NQ Mobile Inc (ADR) (NYSE:NQ)’s success has attracted some high profile investors on the long side who don’t believe the allegations levied by Muddy Waters’ Carson Block. Morgan Stanley disclosed a stake in NQ not too long ago, and venture capital firms have disclosed stakes in the company as recently as last month.