Why NQ Mobile Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of NQ Mobile  (NYSE: NQ  )  jumped more than 12% Wednesday after the Chinese mobile Internet services company announced a collaborative agreement with Sprint (NYSE: S  ) .

So what: Sprint has agreed to use NQ Live to power the next generation of Sprint ID, its interactive, "always-on" wallpaper replacement for Android devices. The NQ press release doesn't specify which phones will feature NQ's software, but the company said it will appear in "all new Sprint Android-powered smartphones in the U.S. market later this year."

Now what: Financial terms weren't released, either, so it remains difficult to say whether the agreement with Sprint -- the country's third largest mobile carrier -- will have a significant positive effect on NQ Mobile's bottom line. However, this notably stands as yet another vote of confidence for the controversial company, which saw shares tumble in late October following extensive allegations of fraud from short-selling firm Muddy Waters.

As it stands, while I personally prefer to wait on the sidelines until those claims are fully resolved, I certainly can't blame NQ Mobile investors for breathing a sigh of relief today.

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Comments from our Foolish Readers

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  • Report this Comment On January 15, 2014, at 5:36 PM, AGFinger wrote:

    Muddy Waters aka Carson Block is nothing more than a felonious hack and certainly should not be referenced in any article that is expected to be taken seriously. Why would anyone consider the nine stocks you’re promoting when you refer to Carson Block as someone that should be taken seriously.

  • Report this Comment On January 15, 2014, at 10:20 PM, TMFSymington wrote:

    @AGFinger, I'm certainly not assuming he's right, but it's a risk of which investors need to remain cognizant.

    Why take us seriously? Here are 3 big reasons: http://online.wsj.com/news/articles/SB1000142412788732399700...

  • Report this Comment On January 16, 2014, at 9:22 AM, SeymoreButts wrote:

    "Controversial Company' ? what is controvercial about the company - Wuddy Waters is controvercial, its victim in this case is getting on with business, very successfully. You really don't give up Steve.

    "The NQ press release doesn't specify which phones will feature NQ's software, but the company said it will appear in "all new Sprint Android-powered smartphones in the U.S. market later this year" - I think there is a clue there in the press release 'All Android smartphones'.

    Do you realize how you write these things - it's all 'not sure how this effects revenue, not sure which phone's.

    Read a little about what NQ Live does and you'll know the potential it has for revenue - the revenue posibilities dwarf the current revenue numbers as each paid add or referral the end user makes will mean money for NQ and it's business partner (Sprint). Research your piece for 5 minutes and you can add some value, rehashing MW is getting boring Steve.

    Your going to be writing more of these over the next few months so please add some value next time. I'll give you another clue, when you write down things like 'Not sure how...' then delete that line, go onto google and actually reseach the question, the results will amaze.

  • Report this Comment On January 16, 2014, at 6:00 PM, MichaelHamilton wrote:

    NQ is the next google

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