With the Holiday season upon us, and all the negative articles circling NQ Mobile I wanted to publish this articles to show some important facts that the shorts are over looking as many have called this company a Fraud.
Overview: This article is to revisit 12 recent facts about NQ Mobile that has happened in the last 3 months that should spark this prepare this stock to jump from the current open price which was $12.98 as of when this article was submitted (11/27/13).
On the first fact of NQ Mobile... (NQ) just off their Investor Day on the 19 of November, NQ management gave their investors a reason to cheer about how bright the future is going to be for the company. It seems the many of the shorts betting against the company and don't agree with the company growth in smartphones in China and the growth of the mobile industry even though large established companies like Intel have claimed they are behind in the ball on the mobile growth.
On the Second fact of NQ Mobile... shorts on NQ are ignoring that most investment company would rather invest in smaller "high growth company's" than large "slow growth company's". Again lets look at NQ and Intel over the past year. While Intel stock might have increased 25% at the highest point, NQ stock price has grown over 100% down from a high of over 300%.
On the Third fact of NQ Mobile... shorts can't attack large grow companies like Intel when they have 4.97 Billion shares outstanding which 4.96 Billion are on the float. They can't move a stock like that without the company actually not performing well. While NQ has only 56.9 million shares outstanding only 29.4 Million are on the float.
On the Forth fact of NQ Mobile... shorts are ignoring the 38.2% are held by instutions while Intel has 62.3% held by instutions. That means 11.2 Million shares are held by the Institutions that are on the float.
On the Fifth fact of NQ Mobile... shorts are ignoring 13.35 Millions shares short on the company. Add that to the 11.2 Million held by institution that's about 24.58 Million of the 29.4 Million floated shares.
On the Sixth fact of NQ Mobile... shorts are ignoring that Muddy Water already attacked NQ Mobile and it is down over 60% from the highs and currently around 40-50% off it's highs now.
On the Seventh fact of NQ Mobile... shorts are ignoring that NQ mobile did transfer over 100 Million dollars in cash, one of there deposits can be found here, which is one of the short claims Muddy Water said they Didn't have the cash.
On the Eight fact of NQ Mobile... shorts are ignoring that institutions investments are increasing, See Seeking Alpha author Justin Giles who as given us the increase in Toro, ChinaRock, Oberweis, and Altimeter investments.
On the Ninth fact of NQ Mobile... Carson Block, who is short the stock, is afraid to stand behind his words in China when he called the company a fraud and said he would only fact charges in the US. I believe the reason behind this is his claims are very vague and in the U.S. that's enough for Carson to speak his claims but in China with out facts of the claim he might face time in prison.
On the Tenth fact of NQ Mobile... shorts are ignoring that the Q3 earnings were off the charts. They are turning a blind eye to the fact that in less than 3 months NQ has to start performing to the goals given to the public.
On the Eleventh fact of NQ mobile... continuing one Q3 earnings NQ Mobile wants to transform the company Revenue from the Millions to the Billions mark, and in fact $4 billion by 2016.
On the Twelfth fact of NQ mobile... short are ignoring the fact that NQ mobile while based in China is Co-run but a strong knowledgeable man Omar Kahn. Omar is based in Dallas Texas and is the only one that is based in the U.S., if this company was a sham as Muddy Water claims, Omar would have to face charges in the US. As a MIT Graduate and has held Senior position in Citi, Samsung, and Motorola i would think that he's smart enough to know a real company from a fake.
Conclusion: With all the negative fraud claims that have already been baked into the stock price and many long investor holding this stock to see the results of the auditors from the Muddy Water claims this stock should return to the highs a couple months ago at the mid 20's. My outlook for the stock for the end of the year is the mid 20's with an outlook for 2014 being $39.
Disclosure: I am long NQ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I plan on increasing my position with any large % drop in NQ mobile.