NQ Mobile Inc (ADR) (NYSE:NQ) Raises Risks and Concerns


Dallas, Texas 07/09/2015 (Financialstrend) – NQ Mobile Inc (ADR) (NYSE:NQ) the Chinese mobile internet services provider in the consumer as well as enterprise segment, has been the subject of much investor concern, in recent times. The company has been witnessing volatility in recent times, although it been consistent and posting gains in the region of 33% since the start of the year.

The immediate triggers for the sudden loss of momentum for NQ Mobile, opine analysts, are the spate of management changes, and divided opinion on the shares. Additionally, allegations of non-compliance with accounting parameters have been widely reported, raising further concerns, for the investor community.

However, there have been bullish analyst firms too, such as Rosenblatt. The latter has begun coverage of the stock, rating the company Buy at a price target of $8.10. Bearish analysts include Tudor Investment and Two Sigma Advisers, besides Muddy Waters. The former two no longer hold position of their earlier stakes of 40,456 shares and 22,520 shares.

Much of the concerns of risk surrounding NQ Mobile Inc (ADR) (NYSE:NQ) stems from its dependence on Chinese markets. The slowdown in recent times has begun to have an impact on the share prices, given its small-cap market value. Thus far Chinese revenue had increased by 103% in the 2013 to 2014 fiscal, coinciding with 21% decline for the same period. In the past few financial quarters, the company reported Chinese revenue of 87% of the total revenue at $290 million. Meanwhile the overseas revenue was reported at 13%, at $42.3 million.

NQ Mobile Inc (ADR) (NYSE:NQ) revenue increase was attributed to the acquisitions the company made. Besides, the margins too have posted decline beginning at 80.2% in 2011 to 31.8% in 2014. Even as questions and concerns of risk persist NQ Mobile Inc is perched decisively for better growth, in comparison to most technology stock peers from China.

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