NQ Mobile sells bonds, faces fall in share price
October 31, 2013 Category Uncategorized
NQ Mobile has joined an elite club of top Chinese web firms with a new USD172 million major bond issue. The company, formerly known as NetQin, sells security software and competes with Kingsoft and with Qihoo 360, whose free security software is becoming the subject of growing controversy. NQ Mobile is now one of the U.S.-listed Chinese tech firms with market values of over USD1 billion, which number less than 20. In the announcement of its new bond offer, NQ said it will use the money partly to fund acquisitions. Purchases could come in a number of areas, including its core security software, its expanding mobile game portfolio and also its growing international business. Short seller Muddy Waters’ called to sell shares of NQ Mobile, saying the company inflated sales. NQ Mobile’s shares plunged, slashing its market value by USD561 million, after its American depositary receipts (ADRs) had gained 279% this year. “At least 72% of NQ’s purported 2012 China security revenue is fictitious”, according to Muddy Waters and NQ Mobile’s market share in China was about 1.5%, against the about 55% it reported. Its China paying user base was less than 250,000, against the 6 million claimed, still according to Muddy Waters. NQ Mobile rejected the allegations, saying the company would respond with more details.
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