Seeking Alpha

bettercorporategovernance

bettercorporategovernance
Send Message
View as an RSS Feed
View bettercorporategovernance's Comments BY TICKER:
Latest  |  Highest rated
  • NQ Mobile spikes higher; Morgan Stanley discloses 5.2% stake [View news story]
    This is the broker dealer side of MS. Not principal investing arm. They are reporting on behalf of their clients. Simply means that the funds doing business with MS broker dealer have collectively accumulated >5% of NQ shares.
    Dec 31, 2013. 12:28 PM | Likes Like |Link to Comment
  • NQ - Why Still So Cheap? [View instapost]
    TY.
    Oct 28, 2013. 12:01 PM | Likes Like |Link to Comment
  • Fraud Or No Fraud, NQ Mobile Is A Gamble [View article]
    The likes of Treasure Hunter and Toro don't care if security revenue is there or not. They just need a constant stream of product launches to sustain the blue-sky scenario of a world dominating mobile platform.

    Really surprised at the magnitude of the fall, showing that the market did care about the fictitious and boring ol' security "business". Aren't we in QE infinity that all that matters is story, concept, and the ability to telling lies with passion?
    Oct 25, 2013. 01:07 PM | Likes Like |Link to Comment
  • NQ – Can FL Mobile Change Your “game”? [View instapost]
    you are nothing but a constant noise.
    Oct 25, 2013. 08:59 AM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    Thank you for your unwavering attention to me. You're the only one here who care to listen to me, at least.
    Jul 31, 2013. 03:13 PM | 1 Like Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    I have been watching the lemmings congregate since Jul 2. The cliff is ahead, and the runway is extended longer. What's the point in stopping lemmings.

    In answering to vitriolic attacks on me on Xueqiu.com (at least it's civil here, though not more intelligent), I just posted my comments there. Too much work and too little impact to translate here when SA does not provide an anonymous forum for naysayers. Find a Chinese friend to translate it for you, if you care: xueqiu.com/S/NQ under kankan123.
    Jul 31, 2013. 03:12 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    I don't hang out on this full time like you. I actually have a job.

    If u want me to explain how an earnout works, I'll spare my one minute:

    an earnout is contingent payment to an acquiree upon meeting certain operating performance. (look, less than 1 min)

    I already posted my lengthy analysis of the terms a week ago, you appear to have missed it.
    Jul 15, 2013. 03:59 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    You fail to comprehend my point, which is: the earnout threshold is very high, and the fact that FL agreed to that earnout showed how eager it was to sell to NQ. If FL indeed achieved those targets, why does it need to sell to NQ for such a low price? The only explanation would be FL doesn't have a good prospect in light of intensifying competition in the mobile "platform" business.
    Jul 15, 2013. 03:57 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    you double counted Red in the earnout targets since Red is wholly owned by Feiliu. So earnouts are:
    If FL gets RMB 52M ($8.3M) in 2013 op profit, NQ issues $7.8M in stocks
    If Red gets RMB 12M ($1.9M) in 2013 op profit, NQ issues $1.5M in stocks
    If FL gets RMB 118M ($19M) in 2014 op profit, NQ issues $7.8M in stocks
    If Red gets RMB RMB 25M ($4M) in 2014 op profit, NQ issues $1.5M in stocks.

    This earnout appears very stingy because: if FL and Red hit all the targets, they will be bringing in $19M in op profit in 2014, and yet their additional payout is only $19M in stocks (higher if stock price goes higher after the payout, but the payout is set in $ terms, not # of shares, which limits the upside in payout).

    The upfront payment was $27M in stocks, which has already been paid out.

    Why is Feiliu willing to sell for so little ($46M total consideration in stocks = $19M+$27M for a $19M operating profit stream starting in 2014 which is a growth of 129% from 2013)? This equates to 2.4x equity value over operating profits in 2014, for a 129% grower. Even if you quadruple that consideration to account for interim stock appreciation, it's only 9.6x.

    Granted NQ owned 23% of FL before, and might have ROFR, but unless it has a call option to buyout FL earlier, FL doesn't have to sell to NQ and can monetize the stake in other ways. Such willingness to settle for NQ by Feiliu can only mean that FL standalone prospect is not very good in light of mounting competition from the big mobile platforms in China. Otherwise, why not wait a year and reap a big fat valuation, whether it's from NQ or another buyer?

    Note that in the term sheet, they write off AR older than six months from profits. NQs own DSO (using end of period AR) was 217 at ye 2012. Using average AR, it was 151 at ye12, but rose from 148 in ye11 and 131 from ye10, even though rev % growth has been slowing down.
    Jul 8, 2013. 06:01 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    you are guessing what the earnout conditions are. what's the point? I can also guess it to be a layup, or unachievable. The certain thing is, without knowing earnout conditions, an earnout based valuation is gray.

    When NQ acquired Feiliu in Nov 2012, it will not be for 2012 metrics (Dec monthly rev of ~$700k only). Who values a target in an emerging category using trailing 12 mo metrics?
    Jul 8, 2013. 05:05 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    AMBO has been halted for months, its CEO is being ousted by the board, auditor resigned. How do u as a common stock holder (ADS holder in a VIE structure no less) plan to recuperate your value? Time will tell, but in the long term, we are all dead (Keynes)

    I have done a lot of on the ground research, in case that got buried in these long threads. To reiterate, I visited numerous carrier stores, convenience stores where prepaid cards of all sorts are sold, spoken with mobile industry ppl, and interviewed many ordinary smartphone users in various cities of China. This is more comprehensive than an HQ visit and stops in a few possibly pre-arranged POS in Beijing.
    Jul 5, 2013. 01:43 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    please don't forget to mention the disclosure section of Wedge notes - that their principals or related people own <1% of NQ. 0.99% of NQ is already quite a lot of money for a small firm like Wedge.

    The fact that Wedge was a short seller in China before doesn't mean they won't turn long. At some point, short selling stops being a viable sell-side model, and to stay in business, a sell side shop has to turn long and complement with some asset mgmt biz.
    Jul 5, 2013. 01:36 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    Do you know that Muddy Water and other short sellers of Chinese stocks were threatened?

    Would it please ur desire for transparency about me if I create an identity? I won't bother regardless of whether it's yes or no.

    I don't make up things even if a fake identity that will make me look like some smart "investor".

    Supporting evidence? Isn't this enuf? A company with scant a website, accounting for half of NQ China revenue, housed in NQ's premise, and claim to be unrelated.

    Do u need black and white paper doc signed by Yidatong founder to say that he/she is indeed complicit? Do u need a US jury to debate 3 days to render a guilty verdict? And then u will call that supporting evidence? Sorry u will never get that, or anything close to that. As the saying goes - the water is muddy there. Evidence lies along a spectrum in any investing, long or short - one is never gonna get the 100% of the picture. If enuf data points are available, one should connect the dots.
    Jul 5, 2013. 01:35 PM | Likes Like |Link to Comment
  • NQ Mobile Is A Deeply Undervalued Battleground Stock Primed For A Major Move [View article]
    So r u saying NQ can protect itself in the case of missing mobile rev guidance simply by canceling the 3.7M earnout shares? What will happen to NQ stock price and all the incentive option holders in its ecosystem?

    u r implying that the earnout is dependent on hitting this mobile guidance. let's see - if they hit 28m indeed, and then assuming the earnout gets paid out, that will be 7.4M total ADS for the company, or $48M total purchase px at the time of the acquisition. $48M for a $28M revenue 40% margin business growing triple digits is still cheap beyond belief. It's more expensive than $24M, for sure, but that's splitting hairs.
    Jul 5, 2013. 01:26 PM | Likes Like |Link to Comment
  • NQ Mobile: Upside Play On Mobile Security [View article]
    For $24M worth of stock counting earnout.
    Jul 2, 2013. 01:56 PM | Likes Like |Link to Comment
COMMENTS STATS
89 Comments
5 Likes