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What: Shares of NQ Mobile (NYSE: NQ ) have dropped today by as much as 11% after the company filed for a secondary offering with the SEC.
So what: Just a few days ago, shares of NQ Mobile plunged after it reported first-quarter earnings, although shares had mostly recovered from that drop until today. The company is selling 6 million American Depository Shares, some of which will be dilutive to existing shareholders while the company raises capital. Of that total, the company is selling 1.2 million ADS's, while existing shareholders are selling the remaining 4.8 million ADS's.
Now what: NQ Mobile will not receive any of the proceeds for those shares being sold by the selling shareholders. Roughly 3.1 million of the ADS's being sold by shareholders are being sold by the CEO, COO, and two directors via various holding companies and venture funds that they have set up. For example, James Ding is selling 1.75 million ADS's through GSR Ventures Fund, the general partner of which he co-owns. The pricing for the offer has not yet been determined.
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