As of Wednesday's close, shares of NQ Mobile (NYSE:NQ) had fallen 70% so far in 2014 after touching a new 52-week-low on Tuesday. The stock now trades at an astoundingly low 2.5 times next year's expected earnings, which makes NQ seem like an absolute bargain at first glance.

But according to the Fool's Steve Symington in the following video, the risks of owning NQ Mobile at this point far outweigh the potential reward.

After all, NQ Mobile is still facing allegations of fraud from noted short seller Muddy Waters. And last week, shares dove more than 30% when -- despite NQ's insistence in June that its independent investigation yielded no evidence of such fraud -- NQ not only told investors its auditor has requested to expand the scope of its 2013 audit, but it also announced the head of its audit committee was stepping down. Worse yet, rather than simply cooperating with its auditor, NQ says it's merely "considering" the request.

And though NQ stock jumped nearly 7% after the company responded to Muddy Waters' latest report, Steve was left wanting more when that response offered no significant new information to address his concerns. Considering there were plenty of other red flags in the months leading up to last week's events that had already scared him away from NQ Mobile stock, he's still convinced investors would be wise to stay away. To hear more about those red flags, as well as a few things investors should be watching going forward, please watch the full video.

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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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