Carson Block, the Muddy Waters LLC founder whose short call prompted a 62 percent plunge in NQ Mobile Inc., says the stock will be delisted amid allegations it fabricated revenue and lied about its cash.
“We have no doubt that in a year from now, this company will have been delisted,” Block said in a Bloomberg Television interview with Stephanie Ruhle on the “Market Makers” program. “Over 90 percent of the revenue doesn’t exist.”
The shares of NQ Mobile dropped 7.9 percent to $13.26 at 11:22 a.m. in New York after rising as much as 10 percent.
NQ Mobile, based in Beijing, said its independent special committee retained the law firm Shearman & Sterling LLP to review Muddy Waters’s allegations. On Oct. 24, the research firm said that “NQ is a massive fraud” and that its “cash balances are highly likely to not be real.” The company responded by releasing data of its bank deposits to investors and held a two-hour conference call on Oct. 25 rebutting Block’s claims.
Ephraim Cohen, NQ Mobile’s external public relations manager at MWW Group, said in an e-mail that the company will make a comment.
© Copyright 2014 Bloomberg News. All rights reserved.