NQ Mobile Inc (ADR) (NYSE:NQ) was a silent player on the market until the news popped out that the audit head stepped down and PWC needed more time to review the 2013 financial results. The stock plunged over 30% yesterday.
David Ingles of Bloomberg discussed about the issue in detail and he explained how everything went against the Chinese mobile-security service provider. He explained the announcement made by NQ Mobile Inc (ADR) (NYSE:NQ) about changes in the board went against the company on the market. Thought the company said that the audit head stepped down for personal reasons, the extra time required by PWC, the external auditor makes it look a bit fishy.
“I think that was the biggest drop in something like, nine months. You know it’s been topsy-turvy really for the past year or so.” Ingles stated about the sudden plunge of over 30% in 2 days.
The stock went to a 33-month low after the announcement which looks shocking. To improve the situation, NQ Mobile Inc (ADR) (NYSE:NQ) brought in two new independent directors that are really in line with some of the recommendations coming from the investigative body that was put in place to check if the company did inflict the revenue at all.
The independent directors are Justin Chen, a California based attorney and another VC investor from China. The new independent directors are heavy hitters and have graduated from top universities. NQ Mobile Inc (ADR) (NYSE:NQ) has also appointed one of its large shareholder as an adviser to the board. This is to enhance the shareholder representation on the board.
“The hop of NQ mobile is, they can now, well, both them and the company’s shareholders can now focus on the company’s fundamentals, but obviously looking at the stock price, that’s not going to happen soon.” Ingles said.