NQ Mobile Inc (NYSE:NQ) was scheduled to release its annual report and the results from the investigation of its accounting procedures. However, the Chinese company issued a press release on Thursday stating that it needed more time to finish its annual report, so it was unable to file it. Analysts at Canaccord Genuity have taken this as a major warning sign and suspended their rating and price target pending the filing of that report.
No “reasonable basis” for NQ Mobile estimates
In a report dated May 15, 2014, analysts Michael Walkley and Siddharth Sinha said because NQ Mobile Inc (NYSE:NQ) failed to file its annual report on time, they don’t see a “reasonable basis” for their estimates. As a result, they have suspended them. They based their price target on their estimates, so they have suspended their price target and rating as well.
NQ Mobile Inc (NYSE:NQ) did not provide a timeline regarding when it might release its annual report. It simply said it would file the report “as soon as possible.
NQ Mobile hits 10-month low
After the Chinese company delayed its annual report, shares fell to a 10-month low, hitting $7.62 per share Thursday afternoon at the New York Stock Exchange. That was a 30% plunge, giving short sellers some traction to earn returns on their short sale of the stock. Put sellers needed a 46% decline for their bearish options expiring tomorrow to earn returns.
The contract expiration date was a key one for investors bearish on NQ Mobile Inc (ADR) (NYSE:NQ), as it was two days after the company was supposed to release information which will probably move the stock in a big way—either up or down. Most investors appear to see this delay as meaning bad news for the Chinese company.
NQ Mobile Inc (ADR) (NYSE:NQ) has been under fire for some time, after short seller Carson Block accused the company of overstating its revenue. This is the second time the company has delayed filing its annual report. NQ Mobile said on April 30 that it was delaying the release of its annual report by 15 days. The company continues to deny the fraud accusations from the Muddy Waters founder.