Muddy Waters Seen Right on NQ Mobile Payments, Wrong on Cash
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Research firm Muddy Waters LLC was correct to focus on NQ Mobile Inc.’s delays in collecting customers’ payments as part of an 81-page report that labeled the Beijing-based mobile service provider a “massive fraud,” according to three accounting experts.
At the same time, accountants, professors and a lawyer interviewed by Bloomberg News said the report’s criticism of NQ’s cash accounting and the way the Chinese company got funds from its U.S. public offering may be unfounded. On other points Muddy Waters raised in its Oct. 24 report, it’s still hard for observers to gauge their validity.