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NQ Mobile sues Muddy Waters, transferring $100M in funds; shares rally

Oct. 29, 2013 10:57 AM ETLink Motion Inc. (LKM) StockLKMBy: Eric Jhonsa, SA News Editor7 Comments
  • NQ Mobile (NQ +8.6%) has filed suit against Muddy Waters in Beijing over the latter's extensive fraud allegations, CEO Lin Yu discloses in an interview with a Chinese site. "We hope Chinese companies listed in the U.S. could consider building an 'anti-Muddy Waters alliance' to combat short sellers," he adds.
  • Separately, NQ announces it's transferring $100M in funds to an account created with U.K.-based Standard Chartered Bank, in an effort to address concerns about the quality and liquidity of its cash balances. MW had declared NQ's cash balances are "highly likely to not exist."
  • The $166M in proceeds NQ received from its recent convertible debt offering will continue to reside in a Hong Kong account.
  • MW, meanwhile, has issued a new report titled "NQ's Top Ten Lies Since Friday." Among other things, MW accuses NQ of lying about its relationship with privately-owned Yidatong (deemed by MW to be a shell company), and about its sales to mobile services firms UMPay and Info2Cell (declared by NQ to be its second and third-largest customers).

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