NQ Rises First Time in Seven Days on Deposit Verification
NQ Mobile Inc. (NQ), the Chinese mobile-services provider that sank 62 percent in the three days after Muddy Waters LLC said it inflated sales, rose as the company took steps to make its bank deposits more transparent.
American depositary receipts of NQ Mobile jumped 7.6 percent to $9.47 at 10:50 a.m. in New York, advancing for the first time since Oct. 18. Muddy Waters, the research firm founded by short seller Carson Block, said in an Oct. 24 report that the company inflated revenue and misrepresented cash balances. NQ Mobile denied the allegations the next day.
NQ Mobile transferred 100 million yuan ($16.4 million) of deposits to Standard Chartered Plc (STAN) and authorized it to independently verify the company’s deposits as well as provide details to investors seeking the information. Separately, the Beijing-based company said that China Mobile Ltd. (CHL), the nation’s biggest wireless operator, allowed the use of NQ Mobile’s technology in the carrier’s music service.
“NQ’s statements on its bank deposits with Standard Chartered and cooperation with China Mobile, a big telecom operator, are helpful to its stock,” Echo He, an analyst at Maxim Group LLC, said by phone from New York today. “An even more effective way for the company to prove itself would be data from an independent party that can verify its market share and business performance.”
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