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Akram's Razor

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  • NQ Mobile: A Neutral Observer's Take [View article]
    Fair enough. I too typically have highly concentrated exposure with respect to portfolios I run, and often in highly time sensitive options. So, I am quite familiar with needing to have virtually zero margin for error. Its not for the faint of heart. But i will tell you nq is not the type of stock a value oriented guy should be looking at. This is something for a high risk growth chasing guy, at which point i'd say you should have a few of these bullets spread across the portfolio becuase the homeruns should generate 5-10x and more then offset the occasional flop/problem child.

    For what its worth, I actually know vnet quite well, well at least the vnet that went public as I have not looked at it since (so maybe knew is more approrpriate as its now nearly 3 years). It was a large holding for an investment firm I used to work for on its IPO. We met with managment and the whole shibang. I will say i was quite against investing as i didn't understand why we should be capitalizing this company to go out and do acquistitions and grow capacity. Struck me as a very bubblish ipo. And in comparison to western peers, made absolutely no sense.
    Nov 6 03:53 AM | Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    I used the term 'related businesses' because they are housed in the same office and supposedly majority owned by the same lady. Also, with NQ pitching themselves as a user acquistition engine for all things mobile including gaming, the fact that her critical to nq security related biz is housed with a gaming company is not exactly irrelevant. But there is no denying that xu's success story could be as you described, however, i hope you see how her going from employee to owner of a critical component of nq's business would be met with skepticism from a external observer.

    As for the buybacks, i have a whole lot of evidence of tech companies that where ROCKS who still stumbled big time because of buybacks. And I have even longer list of smaller names like NQ who literally destroyed their stocks thanks to buybacks. People building a 100 year franchise don't go from buying back stock to raising a convert to making acquistitions to back to buying back stock in a matter of months. It is simply a sign of the wrong type of management you want building a growth company.

    And yes based on what I have seen so far, I think i am right to have a 'low' view of the company. However, I have views long and short on plenty of companies which I have shared on here over the years. You on the other hand seem to literally to be almost solely engaged in bullishly covering nq. And it appears that going back to early this year that you have had to contend with highly suspect views of the company.(i read your instablog post just now)So, I find it ironic that my motives commenting on this situation have been questioned by posters but that yours have not.
    Nov 5 10:27 PM | 1 Like Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    I agree whether she was a consultant or employee and for how long is not that much of interest to me. But the transition from employee to majority owner of these related businesses is something that you don't see very often.

    As for the buyback, you are simply wrong. No matter how tempting it may be you do these transactions, they should be limited until the point when you have built a ROCK and are simply throwing off insane excess cash that you have very little idea what to do with. If Nokia and hpq can get into trouble....and bbry is running around seeking cash to shore up its balance sheet.....nq has no business doing buybacks of the size they have been doing.
    Nov 5 03:59 PM | Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    Since you are on site, I have some questions.

    1) How did xu go from an employee to owner of these companies? Seed capital came from whom? Who are the shareholders of these two entities she runs?

    2) What's the revenue breakdown from these partners?

    3)Why with all the growth ahead do they buy back stock?

    4) Why did they choose to hold nothing in level 1? Does their cfo understand they are a growth business and not an asset mgr trying to maximize yield?

    5)What exactly is the purpose of a US CEO if he doesnt know the top 4 customers?
    Nov 5 02:55 PM | 3 Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    I think you need to be able to tell the difference between reports. Everything between snof and nq was in my opinion weak. He was nowhere near as aggressive language wise as well as pr wise, and frankly speaking the stock impact in every case lasted for two seconds. And i for one longed fmcn on his report. This time is different. He is either right or guilty of quite reckless and libelous statements.
    Nov 5 02:21 PM | Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    Yes, I forgot to mention that excessive press releases that again are hard if not impossible to tie to discernable revenue are another red flag I usually look for. I suggest you count the IOC press releases about major partners over the last three years, that name drop the like of EXXON, BP, etc...and then go find one dollar of revenue from all of them.
    Nov 5 09:28 AM | 1 Like Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    The entire Google App store took in 50ml in revenue in q3. Nq guidance for q3 is 50-51. Lookout, the global leader in this space, has 45ml users and raised money at a 1bil valuation a few weeks ago. Qihu which has 70% mkt share gives away their product for free. Nq claims more active users than all of lookout. Reconciling how their 'take' model is generating these revenues off pre-installs is not exactly easy. I think many 'little kids' would struggle with it. Hence, all the mumbo jumbo about platform, enterprise, gaming, etc
    Nov 5 04:30 AM | 1 Like Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    Actually, for full disclosure sake I did finally collect from SA last month. The email reminders finally got to me. I can say that wire changed my life. Going to disneyland.
    Nov 4 04:22 PM | 2 Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    I am quite familiar with classifcations. And yes by definition, LEVEL 2 is not considered LIQUID. We mark based on quoted prices in relatively much less active markets versus any level 1 instrument which is considered Liquid. And no, showing what they showed was not sufficient because frankly speaking I still don't fully understand what it is they are doing cash mgmt wise. I'd like to understand why they are holding zero liquid cash on hand. And not instruments that can be converted in cash or maybe borrowed against when a short seller publishes a report saying i most likely have no cash. Berskshire, Bidu, Sina, Apple, and Msft feel holding liquid cash is a necesseity despite being able to do the same thing, then why this mgmt team concluded this is no big deal.
    Nov 4 04:05 PM | 1 Like Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    My hunch is that MW's has more, and most likely whatever it may be is coming from some sort of whistleblower who we wont ever here about. But yes, if this is all she wrote, getting on tv and saying 80% of revenues dont exist would be unethical. I short a lot of companies, and I have yet to accuse one of fraud because that is a serious allegation even though at times I have come across some quite suspicious activity. To do so and profit because of it without consequences would be something I would not condone in the least bit. Which is why i wrote that i think he is all in here, and will suffer irreprable damage if he is wrong. That in of itself is what made this different from every other thing he has put out since snof. And for those trading, the fact that the stock remains where it is in of itself shows this is being taken quite seriously by real money in the market. I would be waiting for whatever it is that will be their followup, and then make a call if i wanted to be long.
    Nov 4 03:54 PM | Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    I have zero clue whether or not this is an outright fraud. But if it is not, yes essentially that is exactly what I am saying. Paying attention to all these things is what keeps you out of disasters. They have nobody to blame but themselves because 1bil listed companies should not be making these mistakes. And as a shareholder I'd be furious about all these seemingly explainable red flags especially considering they seemed to be aware that somebody was snooping around, and that another short seller had raised issues.
    Nov 4 03:45 PM | 1 Like Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    If he is wrong here, plenty of people will care. He clearly has pushed this one hard or it wouldn't be performing as it is. They made it easy with a lot of sloppiness, but if more susbtance doesn't follow he is going to be seriously on the defensive. In every other instance he had a lot of red flags, but nothing as aggressive as outright stating we beleive 80% of the revenue is fake and that the cash may likely not exist. So, i can assure you he will be dealing with this headache for a long time if he is wrong.
    Nov 4 12:36 PM | Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    I can tell you outside of Olam, he has had very tempered attacks on the others. Especially sprd which i got burned on because i know tech semi pretty well, and felt all the red flags where hard to ignore. FMCN, I longed. Qihu i have longed and shorted, but never because of anything they put out. The others I have not messed with. But seeing as i did not participate in snof, I would say reading his notes has yet to make me one cent except going against him. However, the only comparable here piece wise is snof which is why the damage if he is wrong here will be permanent and probably quite costly financially for him.
    Nov 4 12:18 PM | Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    Yes, I have no clue what will happen with the convert. If i did, I'd obviously have a position in the stock. And if i wanted to be short biased I'd tell you them being silent is a bad sign. The simple fact of the matter is that at best there are very weak internal controls here, at worst its some sort of fraud. Weak controls can be fixed, and this whole fiasco will lead to just that and longs will recover in time. Fraud on the other hand will be no good for anyone. As an fyi- i am long sina which i can assure you will suffer if that ends up being the i am hoping for the former
    Nov 4 12:09 PM | Likes Like |Link to Comment
  • NQ Mobile: A Neutral Observer's Take [View article]
    What's obvious is the amount of people on here defending the stock with no history whatsoever on the site. I was asked to take a look at the name precisely because I do a good deal of short-selling. That is exactly what this post is about. And I have always disclosed my positions in the past. If I was short this, I would do so here too. And judging by my replies you should have figured out by now that I remain unconvinced on the outcome. What I am however convinced of is that there are a lot things going on here that could have been avoided by a more careful managment team, but having listened to them on CC's and seen their stock sales I am not exactly surprised that they found themselves in this predicament.
    Nov 4 12:00 PM | 3 Likes Like |Link to Comment