Carson Block Vs. NQ Mobile

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Nov. 1 (Bloomberg) -- Bloomberg Television's "Lunch Money" Host Adam Johnson reports on the battle between Muddy Waters' Carson Block and NQ Mobile. (Source: Bloomberg)

Carson locke of muddy waters fired a shot at his latest victim nq mobile.

He called them a massive fraud saying there is revenue that just is not there.

The ceo came on bloomberg and said those allegations were completely false.

Here is nq ceo omar khan and carson block one week ago.

We take these allegations seriously.

Everyone says these allegations are untrue and we form a special committee so this is pretty much standard fraud playbook.

We approach it with transparency and we hosted a conference call with our investors for 2.5 hours and openly addressed their questions.

The questions and answers were asked repeatedly about how they could not have one dollar in operating cash classified as level one.

The the company failed to respond to that muddy waters show the quotations.

We did a lot of on the groundwork trying to find physical residence of its customers, trying to find retailers that have phones with the apps preinstalled.

On the consumer side, we've got integrated and users.

We have 11.3 million premium users which includes the users that we are monetizing through advertising and gaming as well.

We did a lot of analysis of government files regarding nq and its various entities and the companies it acquires and also its largest customer which we concluded is itself.

I don't know his methodology.

We work directly with partners around the world.

We are a channel friendly business model and much of our business comes from preloading on devices.

The questions we have our -- why is all of your cash, not just the term deposits, why is it all level two?

We have not seen it elsewhere in the last 24 hours in response, we got to in the ended investment banks to validate our cash balance on hand.

When you talk about the percentage of the business that is real, this is our expectation -- the regulators lacked against this company or aggressively.

We certainly think there is a good chance of audit or resignation.

That was carson block and the ceo of nq mobile one week ago.

The shares tanked and lost half their value but since it's low, the stock has climbed back about 70% and held ground today during carson's interview on "market makers." we have seen this every time.

We go out and call ccme a massive fraud.

This is a rejects of ccme and others.

They took sharp dives and then the company and the proxies can pump them back up.

And then they are gone.

Thus begins carson block versus nq mobile round two.

Carson is pretty sure he knows how this thing will play out.

This is so familiar to us.

We really have seen this movie before.

We have no doubt that in one year, this company will have beende-listed and the people on the u.s. side who are standing up and saying that i'm talking about the u.s. management -- we think one year from now, they will have lawyers and will be saying how could we have known?

We were not involved.

This process takes a little while but we are very happy with the progress so far.

Let's get back to basics -- what went wrong with nq mobile in the first place?

Over 90% of the revenue does not exist.

You can start with that eating massively inflated.

Over 90%? last week, he says it was at least 72% and that's still high.

This is what omar khan told us at the time.

He is he is missing with large portions of our business and we work with their partners to recognize that revenue.

It's not just revenue we recognize.

Our partners recognizes revenue.

We are in relationships -- here's a perfect example -- when we sell a game or tell an application on the ios platform, apple keeps 30% of the revenue.

We have other partners that collect their revenues.

We recognize net revenues as an example.

Are you sure it's 90%? it's hard to tell.

==with precisi area and -- with precision.

We know the number one source of revenue does not exist rate we called the company and published a piece on this tuesday called "nq top 10 lies since friday." the timing of when the executive left, we will caught them red- handed.

They did not explain why they had light.

Number two, they reveal the identities of their second and third largest customers.

As we show, that was just a poorly conceived lie.

Based on nq's disclosures, the names it gave as numbers two and three could not actually be those customers.

It was yet another lie about the revenue.

Number one does not exist and numbers two and three do not exist anywhere near the quantity that nq claims they do.

Then there are assertions from nq mobile that neither carson block or muddy waters stopped by for a visit to talk to the company.

What do you say about that?

Some answers don't make sense.

We asked repeatedly for our breakdown of where they sell internationally.

They were always cagey about that.

We asked for a list of the sellers of their prepaid cards.

They now claim we have 5000 sellers of these prepaid cards.

They released a list of a handful.

All of the beijing sellers are in the exact same shopping mall.

We have asked for these items before and they refused to give them.

That's because -- when they refused to give them, what was the reason?

We don't disclose that.

That's what they say.

If all of your work is true, should someone be going to jail over this?

Yeah, unfortunately, with all of these frauds we have seen in china, the fraudsters don't get honest.

The chinese dump on us them and that something investors have to understand.

To pull this off, you need collusion from people.

Carson says this, nq mobile says this and one of these guys are wrong.

We know that carson block has been right more than he has been wrong.

Nq mobile ended up losing ground today.

It is down more than eight percent and we will hear from

This text has been automatically generated. It may not be 100% accurate.

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