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) briefly jumped more than 11% in Wednesday's early trading after the Chinese Internet services specialist issued a response to a recent report from noted short-seller Muddy Waters. 

So what: In that report -- which was released a few days after NQ shares plummeted following the announcements of the resignation of its audit committee chair, and that its auditor, PwC, had requested to expand the scope of its 2013 audit -- Muddy Waters outlined the reasons behind its suspicion that "NQ deliberately held back both admissions so that NQ China insiders and their proxies could illegally dump more shares at existing shareholders' expense [...]." Muddy Waters also asserted NQ has likely known for some time that PwC "will never issue an unqualified audit opinion."

But this morning, NQ responded with a press release reminding investors the investigation was overseen by its independent directors and conducted by "two highly respected firms with well-established reputations for integrity." NQ also insisted it "has disclosed material information in a timely manner and in compliance with [...] SEC regulations," and asserted the results of its independent investigation were disclosed "as soon as practical after the special committee concluded its work."

Then -- and keeping in mind Muddy Waters' latest report didn't bring this up -- NQ rehashed its November announcement that senior managers would purchase an aggregate of up to $3 million worth of NQ stock within six months of November 15, 2013. That six-month period actually expired in May, as NQ reminded investors management has been unable to act on the promise because of NQ's securities trading policy. However, NQ reiterated that management remains "fully committed to doing so as soon as legally possible."

Now what: NQ's response notably didn't provide any new information on the state of its audit, its long-overdue annual report, or why PwC wishes to expand the audit's scope. What's more, I'm not convinced NQ did itself any favors by reminding shareholders of an unfulfilled promise from management to purchase a relatively minuscule number of shares using their own money. I personally find NQ's response less than convincing, and still can't bring myself to get behind NQ Mobile stock.

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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.

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