On Tuesday we speculated that shares of Chinese mobile Internet services provider NQ Mobile Inc. (NYSE: NQ) may have reached a bottom. Shares finished the day up more than 25% and are on another tear Wednesday, more than 15% higher in the first 45 minutes of trading. Our question is not if this is a bounce, but if the stock truly is bouncing from a bottom.
The company’s shares dropped by 60% following a report from short-seller Muddy Waters giving NQ Mobile a Sell rating and a share price value of less than $1.00.
NQ Mobile is fighting back, announcing a deal with China Mobile Ltd. (NYSE: CHL) Tuesday and launching a mobile game for the iPhone Wednesday. The company also has made two fund transfers, one for $16.4 million and a second for $25 million, from its deposits in a Chinese bank to a new account at Standard Chartered and authorized the British-based bank to verify the deposits and to make details of the accounts known to investors.
That bank deal may be what has done the trick, because it provides details, including names, of NQ Mobile’s customers that can be independently verified. The company is scheduled to release third-quarter results on November 12.
We remind readers that NQ Mobile is not a likely addition to a widows and orphans fund. You are on your own with this one.
Shares of NQ Mobile were up more than 18% in morning trading, at $13.12 in a 52-week range of $5.07 to $25.90.
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