When NQ Mobile Inc. (NYSE:NQ)was accused of fraud by noted short seller Muddy Waters in October, shareholders endured a harrowing 60%-plus drop over the course of only a few days. However, things had seemed uncharacteristically quiet the past couple of months -- at least, apart from a slew of press releases from NQ regarding new partnerships, and watching several hedge funds open significant passive stakes in the Chinese mobile Internet services company.
But that all changed on Friday, when shares of NQ plunged 20% after its fourth-quarter report badly missed earnings expectations. Sure enough, Muddy Waters unsurprisingly renewed its assault on NQ Mobile in a new research report this weekend, helping shares fall another 13% on Monday.
Fortunately for weary shareholders, the stock rebounded nicely to the tune of 14% Tuesday, after NQ called the selloff "ridiculous"' and announced it had repurchased shares as a result. However, the Fool's Steve Symington argues in the following video that he saw a little too much credibility in the short seller's claims to be able to take them with a grain of salt. To hear exactly what raised Steve's eyebrows while delving into NQ's results, please watch the full video.