NQ Mobile Rejects as False Allegations in Seeking Alpha Article
BEIJING and DALLAS, Dec. 11, 2012
BEIJING and DALLAS, Dec. 11, 2012 /PRNewswire/ --NQ Mobile Inc. ("NQ Mobile"
or the "Company") (NYSE: NQ), a leading global provider of mobile Internet
services, today rejected as false allegations made in an article ("Seeking
Alpha Article") published on seekingalpha.com on December 10, 2012, written
byan author named "FJE Research" who has admitted to holding a short position
in the Company.
(Logo: http://photos.prnewswire.com/prnh/20120125/CN41481LOGO-b )
NQ Mobilestrongly rejects these allegations and notes that FJE Research's
commentary contains numerous inaccuracies and misleading speculations based on
flawed arguments and illustrates a lack of understanding of the Company's
business model. The Company also stands firm and ready to protect its
reputation and reserves legal rights against any deliberately false
accusation. The following statements clarify the key misleading areas
contained in the Seeking Alpha Article:
NQ Mobile market share data in China
Contrary to allegations regarding NQ Mobile's market share in the Seeking
Alpha Article, the third quarter 2012 Sino MR research report indicates that
NQ Mobile has 63% of registered mobile security users in China. Sino MR is
wholly owned by renowned market research firm, GfK Group, and has reported NQ
Mobile's market share in China as greater than 60% in every quarter since May
2011. The Company also notes that the Sino MR research report is among the
very few that are publicly released each quarter.
Because the third quarter 2012 Sino MR report was issued after NQ Mobile
released its third quarter earnings on November 12, 2012, data from the report
did not appear in the Company's third quarter 2012 earnings release.
The third quarter 2012 Sino MR report on mobile security market in China (in
Chinese only) is publicly available at the following link:
NQ Mobile user acquisition channels in China
NQ Mobile mainly acquires users through three major channels. For the third
quarter of 2012, roughly 20% of NQ Mobile's newly acquired user accounts were
acquired from pre-installation with handset manufacturers, which are mostly in
China; approximately 40% were acquired through various online downloading
channels; and approximately 40% were accrued through viral marketing.
The third-party app stores listed in the Seeking Alpha Article are only a
small part of the Company's online downloading channels, and the Company does
not invest heavily in these stores because it finds that the returns on them
do not justify the investment due to their low conversion rates. In the third
quarter of 2012, out of the online downloading channels that the Company
employs to acquire users, less than 20% of the new user accounts the Company
acquired in China are acquired through app stores. The rest are from working
with a number of mobile ad networks to provide users with direct download from
the Company's server. The Company is prudent on spending and constantly works
to minimize its user acquisition cost. The Company finds the ad network
channel to be the most effective and cost-efficient method to promote its apps
and generate registered users.
Pre-installation is another important user acquisition channel for NQ Mobile
in China. Almost 7.6 million, or 20%, of the Company's 38 million newly added
registered user accounts in the third quarter of 2012 came from this channel,
with most of the accounts being in China. The Company has extensive
pre-installation relationships with major mobile device manufacturers. As of
the end of October 2012, NQ Mobile has pre-installed its app in more than 55
million smart devices produced by a number of major manufacturers such as
Huawei, ZTE, Coolpad, Hisense, Gionee, Motorola, Samsung and Nokia.
The Seeking Alpha Article ignored both pre-installation and the viral channels
for NQ Mobile's user acquisition and, for the online downloading channels, it
also ignored the important ad network channel and only focused on the least
meaningful user acquisition channels for NQ Mobile.
Internet search engine indexes, web forums and microblogging websites
The Company does not consider internet search engine indexes, most of which
are performed through Internet search rather than on mobile platforms, to have
any meaningful indication of its user base; nor do internet search engines
form a significant user acquisition channel for NQ Mobile. NQ Mobile has long
stopped promoting web forums as a way of engaging users and rather has
email-based customer care and a call center that takes live customer inquiries
around the clock. Likewise, the Company does not believe its popularity on
microblogging websites has any correlation to its product quality and
popularity. And the nearly two-year-old CCTV event cited in the Seeking Alpha
Article has been addressed by NQ Mobile in May 2011.
Additional relevant management action
Management and employees own nearly 40% of the Company's total current
outstanding shares. Share incentive awards granted to NQ Mobile employees
typically vest over four-year periods. NQ Mobile's founders have recently
announced a two-year lock-up which means they will not sell for at least three
years post-IPO and for nine years following the establishment of the Company.
In addition, the senior management team of the Company has completed a $2
million management purchase plan this year, and NQ Mobile announced a share
repurchase program where it may repurchase up to $20 million worth of its
outstanding ADSs over the next 12 months.
NQ Mobile remains committed to open and transparent communication with its
About NQ Mobile
NQ Mobile Inc. (NYSE:NQ) is a leading global provider of trusted mobile
Internet services built on its world-class acquisition, engagementand
monetization platform. The company was one of the first to recognize the
growing security threats targeting smartphone users and now has about 242
million registered and 85 million active user accounts globally. NQ Mobile's
cloud-basedtrust platform has been recognized by third-party testing
facilities around the world as the most effective solution for detecting and
combating mobile threats. NQ Mobile is recognized as a global pioneer in
mobile innovation and technology leadership. NQ Mobile maintains dual
headquarters in Dallas, TX, USA and Beijing, China. For more information on NQ
Mobile, please visithttp://www.nq.com.
Forward Looking Statements
This news release contains "forward-looking statements" as defined under
applicable U.S. securities regulations. These forward-looking statements can
be identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements.
These forward-looking statements are based on management's current
expectations, assumptions, estimates and projections about the Company and the
industry in which the Company operates, but involve a number of unknown risks
and uncertainties. Further information regarding these and other risks is
included in the Company's filings with the U.S. Securities and Exchange
Commission. The Company undertakes no obligation to update forward-looking
statements to reflect subsequent occurring events or circumstances, or changes
in its expectations, except as may be required by law.
For investor and media inquiries please contact:
NQ Mobile Inc.
Phone: +852 3975 2853
SOURCE NQ Mobile Inc.
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