Why NQ Mobile Inc. Stock Plummeted Today

Is NQ Mobile's drop meaningful? Or just another movement?

Jul 3, 2014 at 1:44PM

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) plummeted by as much as 37% early Thursday after the Chinese Internet services specialist announced its independent auditors have requested to expand the scope of that audit. NQ also announced changes to its board of directors.

So what: Just yesterday, shares of NQ Mobile briefly skyrocketed following what turned out to be unfounded rumors the company -- which is fighting allegations of fraud originally leveled late last year from noted short-seller Muddy Waters -- was close to filing its long-overdue annual report. 

This morning, however, NQ stated its independent auditor has "communicated [...] that it would need to perform additional procedures and expand the scope of its 2013 audit work." The request, NQ says, came sometime after the June 4, 2014, release of its summary findings of the independent investigation. In that summary, NQ insisted no evidence of such fraud was found.

Now what: Curiously, NQ Mobile says it's only "considering" the auditor's request, and will "provide a further update when available." What's more, the audit update was buried in a single paragraph at the bottom of NQ's lengthy press release, which first justified a shake-up in NQ's board of directors and audit committee. Most notably, NQ's current chair of the audit committee informed the board she would be stepping down "due to personal reasons not related to her role at the company effective on July 6, 2014."

Multiple red flags in recent months already had me doubting NQ would receive an unqualified audit opinion, so I just couldn't bring myself to get behind the stock. Today's news, however, has me fully convinced investors would be wise to stay as far as possible away from NQ Mobile.

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information