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  • The War Sprint Can't Afford [View article]
    Why does the author think Sprint needs funding from share issuance? The borrowing cost of Softbank is 1.5% in Japan. Softbank is issuing another $3 - 4 billion at the moment. All it needs is to leverage its balance sheet and in turn lend it to Sprint (while hedging the currency risk). With combined purchasing power (as evidenced by recent partnership with Sharp, which Sprint wouldn't have gotten without Softbank), Sprint should be able to lower its cost basis significantly (plus Brightstar is good at negotiating price). With a few layoffs, Sprint should be able to fund its investment.
    Aug 19, 2014. 08:17 AM | 5 Likes Like |Link to Comment
  • Update: Sprint Planning New Low-Cost Strategy [View article]
    The author clearly doesn't understand Sprint and Softbank well. First, from the time the merger between Softbank and Sprint occurred, the combined company stated it will lose customers because of the network upgrade. As a matter of fact, the company lose less customers than it had initially estimated. On that front, it is doing better than its original plan. Second, Softbank owns 81.2% of the company now and is going to get $50 - 70 billion from its 34.6% investment in Alibaba, which is going to go public in about a month. Softbank also owns more than 40% of Yahoo Japan, which has a market cap of $25 billion. It has deep pocket. Third, the borrowing cost of Softbank is extremely low, i.e. 1.5%. It can leverage its borrowing cost and in turn lend it to Sprint while hedging the currency risk. Fourth, Softbank is extremely successful in unseating dominant players in Japan. With Sprint and Brightstar, it can now leverage the purchasing power of both companies to lower the cost, as we see in the partnership with Sharp. The company wouldn't have gotten the exclusive relationship if not for the purchasing power. At some point, the company will likely find a killer phone that helps it to sell. Fifth, Sprint has the most spectrum among telecom companies. Once iphone is equipped with Band 41, ie. 2.5 ghz, it will outsell others given the speed. Lastly, the world is moving to 4.5G, Sprint is ready for it.

    The bottomline is - don't underestimate Masayoshi. Plus, he recently hired a Google guy. Who knows what will happen next with Google and Sprint.
    Aug 19, 2014. 08:09 AM | 5 Likes Like |Link to Comment
  • Sprint's subscriber losses continue; cost controls boost EBITDA [View news story]
    The most important thing is Sprint delivered it promised and more. It's profitable. Network overhaul is complete and with Masa Son's deep pocket, it's only a matter of time. Plus, Softbank and Sprint combined purchase of phones and equipment already give them a lot leverage with vendors. In addition, Masa Son is providing Sprint with Japan banks to use cheap credit lines. Everything is positive. Plus, Masa Son is an internet guy. Eventually he will turn Sprint into an internet company.
    Jul 30, 2014. 09:07 PM | Likes Like |Link to Comment
  • Sprint's subscriber losses continue; cost controls boost EBITDA [View news story]
    Excellent results! Deliver on promise. Q3 will be even better. Masa Son is, as always, running a tight ship. Sprint is on a roll!
    Jul 30, 2014. 09:55 AM | 2 Likes Like |Link to Comment
  • Did NQ Mobile Officially Fire PwC? [View article]
    PwC was fired for sure. I would imagine this is considered "disagreement" under SEC rules. When you look at the language of the press release, I am sure PwC insisted to add the language that had it been able to perform its duty, it might not rely on the management representation. For a former big 4, this is formal disagreement. I am not even sure if I was the partner on the engagement, I would agree to public ally state there is no disagreement. Therefore, there is the delay in filing SEC.
    Jul 28, 2014. 03:40 AM | Likes Like |Link to Comment
  • Parsing NQ Mobile's Firing Of PwC [View article]
    When you combine PwC effective resignation with the stepping down of audit chairwoman, it just doesn't smell right. In addition, MBP seemed to have itself associated with fraudulent Chinese companies such as Ambow Education and others. This smells bad. I guess you can just call MBP and they will sign anything for a fee?
    Jul 20, 2014. 10:03 AM | 3 Likes Like |Link to Comment
  • Research Report: What Baseball Can Teach Us About NQ Mobile [View article]
    By the way, NQ announced this arrangement with Hasegawa Kousan in Japan. I live in Japan and never heard of this company. Based on my research, it's just a small company in Tokyo that does very low end work (with small revenue/profit). I am surprised how desperate NQ is to get media attention. Another trick in my view.
    Dec 12, 2013. 03:55 AM | Likes Like |Link to Comment
  • Is The Money Real? [View article]
    Can't agree with you more. I have seen a case where we had to hire a private investigator to check the sales of a retail company based on a tip. The PI sat there for the whole day and looked at every purchase by customers from across the street. At the end of the day, he went in and asked the store to print out the sales receipts. It turned out the sales, according to the register, are much higher than what was actually sold. This investigation was done on a large population and this is a pre-ipo company. In any case, the investment banks still invested in the company and tried to cash out later. This is CHINA! Everyone gains but the investors.
    Nov 22, 2013. 08:37 AM | Likes Like |Link to Comment
  • Is The Money Real? [View article]
    The question is not about verifying cash, but tracing the cash (as a real auditor would do). Chinese are very creative with fraud so just looking from a western perspective is not going to work. One can easily get cash from a friend and sign a contract of some sort, and boom, the money comes into the company's acct. The question is where the company hides the other half of the accounting entry (should be payable or prepayment, both liabilities). I would be more interested in now checking the liability side since we know the cash is possibly there.

    Anyhow, the point is that, at this point, just looking at cash is futile. According to Chinese news, NQ has some hedge fund friends working with them now. I wouldn't be surprised some cash was moved in lately. The areas I would look at is the recent change in liability side.
    Nov 22, 2013. 08:29 AM | Likes Like |Link to Comment
  • NQ Mobile Posts Record Revenues: Strong Growth Provides Investors With The Potential For Massive Gains [View article]
    At this point, whatever the revenue they claim is meaningless until proving innocent. This SP (YDT) everyone is talking about is very very likely a scam (i.e. no office, no one heard of including reception in the lobby etc, and these guys are supposedly billing millions and millions for multiple vendors). Acknowledged cash is there - only $100 m really excluding the convertibles, which was recently raised so not enough time to waste it. If I recall, NQ also sold shares to a Chinese hedge fund recently. So the net cash is really not that much.

    Another point is Toro Investment is now proven to be self interested to inflate the stock while writing all the positive comments on NQ. This hedge fund is small and very leveraged at the moment. After its recent blowup in Ambow, Toro seems to be all in with NQ at the moment. They will say whatever it takes to not blow up this company or they are finished.

    Disclaimer, no position in this company or any Chinese companies. Just hate fraudsters.
    Nov 14, 2013. 09:16 AM | 2 Likes Like |Link to Comment
  • Fannie Mae: This Dog Is For Traders Only [View article]
    FNMA is an interesting case - one wonders what the government will do. Technically the shareholders own the company but legally it's government's. How will this be resolved?
    Nov 7, 2013. 07:46 PM | Likes Like |Link to Comment
  • Another Test Of NQ Mobile's Credibility [View article]
    By the way, having NQ software installed in partners like ZTE, Lenovo etc doesn't really mean anything. In China, NQ has to pay to these companies to have it pre-installed. It's not like NQ is making money off it. And that is why these partners don't want to be named as it is not a great practice in itself (and along the way, some individuals in ZTE, Lenovo etc "might" have taken kickbacks). They only came out to support NQ maybe due to political pressure (because we all want to support Chinese companies to get money from foreigners). I am not saying this is the case but as a Chinese, you learn to view things with a natural suspicion. Western ethics just don't work in China.
    Nov 7, 2013. 07:40 PM | Likes Like |Link to Comment
  • Another Test Of NQ Mobile's Credibility [View article]
    I don't hate Chinese companies but it's quite obvious ethical behaviors are lacking in most Chinese companies. As a CPA, I have witnessed things that would just take too long to describe. Just look at LongTop, how they are faking cash is beyond belief and a black eye to all Chinese companies (i.e. they beat up the auditors and stop them from vouching for cash - read the auditor letter to SEC pls). NQ is a classic "suspicious" Chinese company, to say the least. Time will tell. YDT is a classic case of Chinese companies "draw" revenue whenever they need. There is no substance in that company. The best thing is - I am not long and I am not short - so I can see things more clearly.

    At the end of the day, it's just not worth the risk to deal with Chinese companies. BIDU and EDU - they had bad histories and were able to clean it up somewhat (洗白了一点尔已).

    Again, there are good Chinese companies but one have to be extremely careful. Best of luck.
    Nov 7, 2013. 07:25 PM | 1 Like Like |Link to Comment
  • Another Test Of NQ Mobile's Credibility [View article]
    WHY beating up the author? Apparently the longs are desperate and trying to quash any negative opinions. Look, someone just wrote an opinion and you can choose to believe or not. I have no position whatsoever in NQ and as a matter of fact, don't buy any Chinese stock although I am Chinese and a CPA. The bottom line is if you buy a Chinese stock, you CHOOSE to take the risk. Being a Chinese myself, I question the viability of many Chinese companies so I choose not to touch any. Fraud is just prevalent in China and "圈钱“ or cheating for money, is a common theme among Chinese. At the end of the day, just don't be the last guy holding the bag. In the case of NQ, it's amazing how many Chinese have negative opinion of the company and yet the foreigners who have almost zero knowledge of China are propagating it. It's just FUNNY.

    Good luck to either side! Truth will prevail. Again, I have no position in the company and just hate fraudsters.
    Nov 7, 2013. 05:53 PM | 5 Likes Like |Link to Comment
  • NQ Mobile: Still Too Many Red Flags, Remains Highly Suspicious At Best [View article]
    I can vouch for the Chinese articles the author provided. I read those articles in Chinese. It is very interesting Atlantis Investment Management is behind some of the recent purchases as it was stuck with some of the purchases from early part of the year, now they are trying to keep the price up and dispose later. This would probably not happen in the U.S. but it does happen frequently in China (ie friends help friends).

    More interestingly, I have never seen so many Chinese in China are rooting for Muddy Water. This is quite interesting as Chinese understand the whole US market is a giant casino that allows them to "圈钱“. They generally don't have an ethical issue with it. But somehow this time Chinese people are upset with NQ for apparently few heard of the company .

    I have no position in NQ, just dislike frauds.
    Nov 5, 2013. 09:17 AM | 4 Likes Like |Link to Comment
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