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What: Shares of NQ Mobile (NYSE:NQ) started the week by extending its already stunning losing streak, closing down another 17% on Monday after new allegations surfaced saying the company has announced false partnerships.
So what: Remember, NQ Mobile stock had already tanked more than 60% to close last week, when noted short-seller Muddy Waters issued an 80-page report accusing the Chinese mobile Internet services company of fraud.
Now, a report on NetEase's financial website alleges that NQ Mobile issued a press release on Sept. 26 that falsely stated it had secured an extended agreement to supply preloaded mobile security software for devices made by Chinese smartphone specialist ZTE. What's more, NetEase reports that ZTE representatives have told it (roughly translated), "We have repeatedly asked [NQ to] delete this news."
Now what: If investors were worried when the initial Muddy Waters report surfaced last Thursday, they're probably terrified now. NQ says it has formed an "independent special committee" to fully investigate Muddy Waters' claims, so it'll take some time to fully comb through those allegations. In the meantime, however, I certainly can't blame investors for wanting to stay on the sidelines.
Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends NetEase.com. Try any of our Foolish newsletter services free for 30 days. 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.