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Kevin
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I am an individual investor mainly focused on tech stocks. I currently run an online advertising business.
  • NQ Mobile: App Stores Download Data & Evidence Of Partnerships 43 comments
    Jan 7, 2014 5:05 PM | about stocks: NQ

    This is data of NQ Mobile's download statistics from app stores and evidence of partnerships I had gathered online with some outsourced help.

    Updated 2/16/2014: Added evidence of preinstallation with Cubot and Cherry Mobile at bottom. Added App.Vmall.com (Huawei app store) download data.

    Brief Explanation of NQ Mobile's Reported User Metrics

    First though I believe that the user metrics reported by NQ Mobile may require some clarification for those not too familiar with them. I often see others say that there's no way or they don't believe NQ Mobile can have 300 or 400 million people using their app.

    They are partially correct since the 300-400 million user number (426.6 million based on third quarter earnings for 2013) is a total cumulative registered user number. The number started at 1 when someone downloaded a NQ Mobile app the very first time and only goes up as new download and preinstall users are added. As a result the cumulative registered number is different from the number of active users which NQ Mobile discloses separately. NQ Mobile said they had 133 million monthly active users at the end of the third quarter in 2013.

    An easy way to look at this is with Twitter and their total user accounts and active user accounts. Twitter may have a total of 883 million registered accounts but their monthly active user accounts are only 232 million. The 426.6 million cumulative registered user accounts for NQ Mobile are like the 883 million total registered user accounts with Twitter. It is a lot larger than active user numbers.

    HAXED

    Disclosure: The author is long NQ. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

    Themes: long-ideas Stocks: NQ
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Comments (43)
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  • rlindsa
    , contributor
    Comments (8) | Send Message
     
    Nice work. Thanks!
    8 Jan, 02:59 AM Reply Like
  • Trade Star
    , contributor
    Comments (600) | Send Message
     
    excellent work. very helpful.
    8 Jan, 04:33 AM Reply Like
  • NQ Shareholder
    , contributor
    Comments (148) | Send Message
     
    This is terrific.

     

    I hope you are working on getting this published.

     

    Thank you for your hard work putting this all together.
    8 Jan, 02:08 PM Reply Like
  • Dutch Trader
    , contributor
    Comments (1123) | Send Message
     
    Great article!
    8 Jan, 02:43 PM Reply Like
  • lj2013
    , contributor
    Comments (35) | Send Message
     
    Thanks Kevin. Great article and research work.
    8 Jan, 02:56 PM Reply Like
  • TitanInvestor
    , contributor
    Comments (194) | Send Message
     
    awesome article
    8 Jan, 03:05 PM Reply Like
  • AYMERICK
    , contributor
    Comments (77) | Send Message
     
    Kevin,well done.Long NQ with 15000 shares. My whole fortune!!!!
    8 Jan, 03:20 PM Reply Like
  • AYMERICK
    , contributor
    Comments (77) | Send Message
     
    Kevin,well done! Long NQ with 15000 shares,My whole fortune!!
    8 Jan, 03:22 PM Reply Like
  • SimonTIghe
    , contributor
    Comments (43) | Send Message
     
    Thank you for this article.

     

    Guys, has anyone seen an update on NQ Live and when it will be let loose. It's such a game changer for NQ.

     

    I'd like to know what others thought of the potential of this product (I have read Justin Giles piece), I was hoping to hear whether you guys think that users who have this pre-installed (rather than downloaded purposely) will use it en-masse or will turn it off. If the NQ Live skin appears over the OS from the start, most users will assume it's part of the OS and should use it.

     

    If 20% of users actually use NQ Live daily, I would be very impressed - am I underselling it ?

     

    The 1-2-5-10 strategy will of course require NQ Live to thrive. Just wondering what people's take on where it's at, what success we might see from it.
    8 Jan, 03:50 PM Reply Like
  • roxron9
    , contributor
    Comments (27) | Send Message
     
    @SimoTIghe :My personal opinion: I don't think NQ live has to thrive for 5-10 strategy. NQ just has 14 million premium users right now, without NQ live. This is a drop in the ocean. Close to 1 billion smartphones will be sold this year alone, majority Android.

     

    At present close to 1.7 b phones are being sold every year (smartphone+featurepho... I won't be shocked to see 1.7b smartphone shipments by 2016. The scale is just huge. Can NQ reach cumulative premium users of 100 million in next 2-3 years, I can't see a reason why not. The distribution deals they have signed are big.

     

    On NQ live, they said the developer kit will be available in Q1, so I don't expect to see much till Q3 ? Maybe a lot of deals till then ?
    I do think the potential is huge, but the developers have to get excited about it.

     

    If NQ live thrives, then we might see visibility into $1b much sooner.
    16 Feb, 07:55 PM Reply Like
  • User 14165822
    , contributor
    Comments (48) | Send Message
     
    Nice.
    8 Jan, 06:00 PM Reply Like
  • IamHopeful2
    , contributor
    Comments (127) | Send Message
     
    Great article..and no surprise that Shorting Alpha didn't pick this up...they only seem to be interested in assumptions and anonymous portfolio manager's opinions that justifies shorting NQ...
    8 Jan, 06:55 PM Reply Like
  • Justin Giles
    , contributor
    Comments (1523) | Send Message
     
    Great Stuff! Thanks for taking the time to publish it.

     

    If you want to dispute your article and make your case why it should be allowed here is some contacts you will find helpful.

     

    george@seekingalpha.com (SA Manager)
    support@seekingalpha.com
    submissions@seekingalp...
    contributors@seekingal...
    8 Jan, 07:33 PM Reply Like
  • EquityTrader1975
    , contributor
    Comments (243) | Send Message
     
    just in why have you not wrote any positive artlces, have you sold out
    15 Jul, 08:16 AM Reply Like
  • Dave Kelly
    , contributor
    Comments (86) | Send Message
     
    Outstanding research! Well done. Thank you for your hard work on this.
    8 Jan, 09:56 PM Reply Like
  • thornpig
    , contributor
    Comment (1) | Send Message
     
    Excellent work! Thanks a lot!
    9 Jan, 01:11 AM Reply Like
  • haggerston_station
    , contributor
    Comments (27) | Send Message
     
    Great work Kevin.

     

    NQ Live will be the big one.
    9 Jan, 02:03 AM Reply Like
  • brillopad
    , contributor
    Comments (33) | Send Message
     
    Thank you, Kevin, for what appears to be a well-researched, time-consuming article. I am also long NQ, partly due to Peter Lynch's advice...I love having NQ on my HTC!
    9 Jan, 09:42 AM Reply Like
  • Dthampi2009
    , contributor
    Comments (50) | Send Message
     
    great work and research. Not sure why this is in the instablog. Should be published as an article. Thanks for sharing.
    9 Jan, 01:20 PM Reply Like
  • SivBum
    , contributor
    Comments (1581) | Send Message
     
    I have to agree with most other readers ... awesome work !!! NQ IR should hire you as a consultant unless they have done similar work already. Thanks a million.
    9 Jan, 07:53 PM Reply Like
  • Stockman1st
    , contributor
    Comments (5) | Send Message
     
    Kevin,

     

    Very impressed with information and time put into this! I am not at all surprised at SA failure to publish. Long and strong NQ

     

    Stockman1st
    9 Jan, 10:48 PM Reply Like
  • headhunterinva
    , contributor
    Comments (13) | Send Message
     
    Great work!! Thanks.
    10 Jan, 01:20 AM Reply Like
  • Vincent
    , contributor
    Comments (60) | Send Message
     
    You let me increasing my confidence! I am long 8k share of NQ, holding 50 March 22 calls and -5 Jan 18 puts, -5 Feb 22 puts. Thank you.
    10 Jan, 03:08 AM Reply Like
  • GrowthGeek
    , contributor
    Comments (908) | Send Message
     
    What? SA editors will publish an article by Paulo Santos that is about two paragraphs saying that NQ looks crowded based upon the number of comments on his previous article, but they will not publish this thorough research? What's wrong with this picture?
    Look out, however, if Paulo sees how many comments are already here on an InstaBlog he may get another article published saying that NQ looks "incredibly crowded." Sometimes I just shake my head, but I do love SA most of the time.
    10 Jan, 11:26 AM Reply Like
  • Barhum
    , contributor
    Comments (22) | Send Message
     
    Thank you Kevin for the foot work, very appreciated. I can't imagine how much time and efforts you put in there.
    Chapeau.
    10 Jan, 12:34 PM Reply Like
  • Dane Drefke
    , contributor
    Comments (8) | Send Message
     
    Excellent article Kevin. Very thorough with ample evidence. Thannk you!
    10 Jan, 12:44 PM Reply Like
  • theinnerage
    , contributor
    Comments (4) | Send Message
     
    Kevin, looks like more work than Muddy Waters' Carson Block's failed previous short sold 81 page "report" of NQ being a "fake company."(ironically, the fake company was Muddy Waters itself).

     

    Kevin, tailor the guidelines to SA or another good media outlet. Your thorough project is a MUST read for ignorant shorts and long investors alike. Thank you much!

     

    Get er' done!!
    12 Jan, 11:43 PM Reply Like
  • Venkatdamera
    , contributor
    Comment (1) | Send Message
     
    Great work, really appreciate effort!
    12 Jan, 11:59 PM Reply Like
  • Riaguy
    , contributor
    Comments (7) | Send Message
     
    Excellent in depth work. Thank you for sharing. SA should publish it as a feature article on how to do correct due diligence
    12 Jan, 11:59 PM Reply Like
  • Afam Edozie
    , contributor
    Comments (250) | Send Message
     
    Good article and thorough research.

     

    Given the controversy around MW's report on NQ and the allegations that their market share numbers are fictitious and that their products are malware, I must say shame on Seeking Alpha for not publishing this article.

     

    The research is not available elsewhere and in my opinion offers a more objective view than the MW report which they did find fit to publish. It is of a much higher standard than the two subsequent articles on NQ from MW published by SA.
    15 Jan, 12:26 PM Reply Like
  • Julez Durham
    , contributor
    Comments (38) | Send Message
     
    Awesome research. Keep knocking on doors. One will open just a crack and I suspect, not only are you a researcher but also a good salesperson. I suspect, you'll have them at HELLO.
    15 Jan, 10:36 PM Reply Like
  • playball23
    , contributor
    Comments (2) | Send Message
     
    Kevin, what is your thought on the acquisition of AirWatch by VMware. http://bloom.bg/1kZC7p8
    Seems it would validate the space. Furthermore, AirWatch is expected to have 75million in revenue for 2014 with a buyout value of $1.5billion. NQ is expected to have $290million+ in 2014 revenue with a current market cap of $1.1billion. Value?
    22 Jan, 08:33 PM Reply Like
  • Kevin
    , contributor
    Comments (60) | Send Message
     
    Author’s reply » For clarification almost 100% of AirWatch's revenue is from MDM services. So 100% of their revenue is from enterprise customers. They were acquired at around 20x annual revenue.

     

    NQ Mobile's MDM service revenue is mostly from NationSky. which they acquired fully in July. NationSky had around $15 million in revenue for Q3 of 2013. However almost $11 million is from reselling hardware like tablets and phones while the other $4 million was for MDM services.

     

    Here's a very simple and rough estimate. So the current revenue run rate for MDM service revenue from NationSky is $16 million (4x $4 million). If you assign a 15x to 20x multiple to that like AirWatch, that gives a $240 million to $320 million value for the MDM portion. Assuming the hardware revenue gets around a 1x revenue multiple that's another $40-$50 million. That would value NationSky by itself at $300-$400 million.

     

    FL Mobile is worth probably worth another $350-$500 million if you use similar valuation levels as CMGE, a leading Chinese mobile game publisher.

     

    So NationSky and FL Mobile together should be worth $600 to $900 million if all their financials are accurate and you use comparable valuation levels of competitors. This is before assigning any value to their mainly consumer oriented mobile security business.

     

    However there aren't any publicly traded mobile only security companies I know of. The closest company to them is Lookout but they are private.
    23 Jan, 01:33 AM Reply Like
  • bashiru
    , contributor
    Comments (120) | Send Message
     
    Great and well researched article.

     

    Not in the least bit surprised that SA refused to publish this column; to me their refusal to publish lends credence to potential collusion with shorts who conjure up baseless accusations. Some of my comments and those of other credible contributors were strategically removed.
    23 Jan, 10:28 PM Reply Like
  • wayneli
    , contributor
    Comment (1) | Send Message
     
    nice work
    31 Jan, 04:49 PM Reply Like
  • AYMERICK
    , contributor
    Comments (77) | Send Message
     
    Every time the stock falls under 16 I buy. It's incredible that some people always can believe that this can be fraud when you see the contracts they have with big international companies. This article is really great stuff.
    1 Feb, 01:06 PM Reply Like
  • roxron9
    , contributor
    Comments (27) | Send Message
     
    Good work Kevin. From my understanding, just downloading or pre-installing, doesn't count as a registered user. Subscriber has to register their product to be counted as a registered users.

     

    Great effort, well done.
    16 Feb, 07:33 PM Reply Like
  • Shareholders Unite
    , contributor
    Comments (2647) | Send Message
     
    I have to say, an extraordinary amount of work, kudo's to you, Kevin.
    16 Feb, 09:26 PM Reply Like
  • TitanInvestor
    , contributor
    Comments (194) | Send Message
     
    Once again great work.

     

    1. Would it be possible for you fix the link for Protection (Mobile Insurance) under the Baidu App Store. When I click it, I get an error page

     

    2. Do you know of any way to track downloads for America Movil? Is there a Latin America app store of sorts?

     

    Obviously you are under no obligation to help out with either 1) or 2). But if you do, thanks!
    3 Mar, 11:30 PM Reply Like
  • EquityTrader1975
    , contributor
    Comments (243) | Send Message
     
    look, I have NQ vault, NQ phone finder and gods and dragons, but non of them produce any revenue, I don't pay for any of it, but I like NQ vault I would paid just to down load it, but I here there are similar type apps
    15 Jul, 08:26 AM Reply Like
  • EquityTrader1975
    , contributor
    Comments (243) | Send Message
     
    maybe seeking alpha didn't publish this because non of it is true?
    15 Jul, 08:35 AM Reply Like
  • EquityTrader1975
    , contributor
    Comments (243) | Send Message
     
    don't forget I also have NQ vault on my nokia window phone
    15 Jul, 09:03 AM Reply Like
  • Tradestoxx
    , contributor
    Comments (33) | Send Message
     
    Great research Kevin. I'm linking this to my Stock twits tweets. You have clearly shown they have a MASSIVE # of downloads across all their products and it's certainly enough to have generated the kind of paying customers that support NQ's revenues. Add this to the Deloitte forensic investigation and the fact that PwC hasn't apparently found any fraud despite months of auditing and I'd say that NQ is destined to be an enormous winner. I know you wrote this article w/ the stock at 14+ but I certainly hope you're in it now to enjoy the upside that is coming soon.
    16 Jul, 02:27 AM Reply Like
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