NQ Mobile (NQ) dropped 50% Thursday after a short seller, Muddy Waters, issued a strong sell rating on the stock and called it a fraud. Muddy Waters thinks NQ is worth zero since it's a scam. Is NQ Mobile (NQ) a fraud and a scam? I sorta doubt it.
I upgraded NQ Mobile (NQ) to buy back in March 2013 when the stock was trading between $7-$9. Since then, shares have rallied to $26. While I hated it above $15, the company seemed to be legitimate. The Co-CEO Omar Khan is a frequent guest on CNBC and they claim to have over 300 million users. That is a large number to be called a scam. With all of the Chinese scams going around since 2011, NQ Mobile was the last company I thought would be called a scam.
NQ Mobile (NQ) will hold a conference call at 8:30am EST today (October 25, 2013) and they will try to help investor spirits. I'm expecting NQ stock to bounce back above $14 but if we see a drop below $8, it might be worth a lottery ticket.
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