A letter turning down a Freedom of Information Act (FOIA) request for the Security and Exchange Commission’s (SEC) investigative records into NQ Mobile Inc (ADR) (NYSE:NQ) gave the reason that “staff responsible for this matter have confirmed that releasing the withheld information could reasonably be expected to interfere with an on-going enforcement proceeding,” which is still an important confirmation in and of itself. NQ Mobile is roughly flat in trading today, as most investors must have expected that the SEC was looking into allegations against the company.
SEC investigation not surprising all things considered
NQ Mobile Inc (ADR) (NYSE:NQ)’s troubles started last year when Carson Block’s Muddy Water Research released a detailed short thesis that accused the company of cooking its books and called it a zero stock. The stock immediately fell from above $25 to less than $9 and despite a rally back in March is now trading in the mid-$6 range. A delayed 20F filing, the dismissal of PricewaterhouseCoopers Zhong Tian LLP (PwC), and the recent departure of the company’s CFO have all encouraged short sellers that something is amiss.
With all that in mind, it would be more surprising if the SEC weren’t investigating NQ Mobile Inc (ADR) (NYSE:NQ). Without more information it’s hard to speculate on how this affects the relative position of longs and shorts since we don’t know which allegations the SEC is focusing on or which way investigators are leaning.
Every month and quarter, multiple reports on average hedge fund returns are released from several sources. However, it can be difficult to sift through the many returns to uncover the most consistent hedge funds. The good news is that Eric Uhlfelder recently released his "2022 Survey of the Top 50 Hedge Funds," which ranks the Read More
Bison Capital offer supports NQ Mobile price, but doesn’t convince shorts
NQ Mobile Inc’s (ADR) (NYSE:NQ) price is also being supported by the non-binding buyout offer from Bison Capital at $9.80 per ADS. While that’s a healthy premium to NQ Mobile’s current price, it’s less than half what it was trading at before Muddy Waters started its short campaign, and if NQ Mobile is able to prove the shorts wrong you would expect its stock price to soar past the $20 mark again. Many shorts have said that if NQ’s management goes through with the deal it will prove them right because it means that people in the know would rather cash out than keep fighting. If insiders knew that the business model was sound, it would make more sense to fend off potential suitors and buyback as many stocks as they can while the price is so depressed.
H/T Probes Reporter and HVST.com
NQ Mobile Being Investigated By The SEC
Updated on
Why doesn’t anyone look at Bloomberg who gives MW full access? Their bureau chief on the West Coast is married to NQ competitor exec. This gives the short and distort supposed credibility. .. corruption at it’s finest. Imo
Sleazy old news. The SEC is only interested in investigating short and distort crooks and companies who use them to bash competitors like Lookout Mobile does. Imo
Absolute worthless old news. The addressee is redacted and it was requested by Muddy Waters. This was a refusal letter from the SEC not a confirmation of any investigation. I have now eliminated Value Walk from my accepted email list
Comments are closed.