Shares of NQ Mobile (NQ) are down another 18% in afternoon trade after short-seller Muddy Waters said the company’s disappointing quarterly earnings, announced last Thursday, were influenced by greater auditor scrutiny.
In a post on its website, short-selling research firm Muddy Waters, which made a very public disclosure that it was short NQ’s stock in October 2013, called the company’s quarterly report disappointing. Muddy Waters said it believes the company’s auditor increased its level of due diligence during its 2013 audit. Muddy Waters also said that NQ’s revenue growth and increased guidance are the only tools the company has left to keep its stock price up.
Last Thursday, NQ reported fourth quarter adjusted profit that missed expectations on revenue that topped estimates. The company also disclosed that it identified an accounting overstatement related to share-based compensation for the three and nine month periods ended September 30.
Following its quarterly report, NQ shares lost 20% during Friday’s session. Over the last month, shares of NQ are down more than 40%. In afternoon trade, shares of NQ are down $2.23, or 17.6%, to $10.47. :thef
Analysts have a consensus price target of $23 on NQ Mobile Inc (ADR)(NYSE:NQ) which indicates a 89% upside. The consensus rating of the stock is a HOLD with a score of 2.33. There are currently 3 Buy ratings, 2 hold ratings and 1 sell rating on the stock.
A recent analyst action consisted of Topeka Capital Markets reiterating their Buy rating and $30 price target on April 11th, 2014.
Suggested Reading: Top Travel Destinations in South America
