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Renren Inc. Message Board

k2ava2j 2 posts  |  Last Activity: Dec 18, 2014 7:23 PM Member since: Jan 23, 2005
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  • Net revenues in the first quarter of 2014 increased 140.1% year-over-year to $79.8 million from $33.2 million in the same period in 2013. Non-GAAP net income attributable to NQ Mobile was $7.1 million in the first quarter of 2014, compared with $10.5 million in the first quarter of 2013.
    Net revenues in the second quarter of 2014 increased 97.2% year-over-year to $81.6 million, up from $41.4 million in the same period in 2013. Non-GAAP net income attributable to NQ Mobile was $12.1 million in the second quarter of 2014, compared with $15.0 million in the second quarter of 2013.
    Net revenues in the third quarter of 2014 increased 49.8% year-over-year to $81.2 million up from $54.2 million in the same period in 2013. Non-GAAP net income attributable to NQ Mobile was $3.7 million in the third quarter of 2014, compared with $17.4 million in the third quarter of 2013.
    Board changes: A new independent director, Mr. Roland Wu, has been appointed to the Board, effective immediately. In addition, Mr. James Ding and Mr. Xiuming Tao are stepping down from their positions on the Board for personal reasons, effective immediately. At the same time, Mr. Justin Chen has been appointed the chairman of the Corporate Governance and Nominating Committee of the Board. After the appointment of Mr. Roland Wu and the resignation of Messrs. James Ding and Xiuming Tao, the Company now has a total of nine directors on its Board, including five independent directors.

    Guidance: The Company expects net revenues to be in the range of $82 million and $83 million for the fourth quarter of 2014, bringing the expected full year net revenues to the range of $325 million to $326 million, up from the previously issued range of $320 million to $325 million.

  • NQ Mobile Rejects Bison Capital's $785M Buyout Offer And Why I'm Buying This Dip
    Oct. 31, 2014 1:27 AM ET | 107 comments | About: NQ Mobile Inc. (NQ)
    Disclosure: The author is long NQ. (More...)

    NQ Mobile announced Tuesday that it has formally rejected Bison Capital's privatization offer.
    Why I believe shares dropped on the announcement and why I'm buying this dip.
    This announcement only increasing my bullish outlook on NQ Mobile and why this was a great move by management for shareholders.
    After waking up Monday morning to NQ Mobile's (NYSE:NQ) unqualified audit, investors were treated to another treat this holiday season as the leading global provider of mobile Internet services formally announced that it has rejected Bison Capital's privatization offer of $9.80 per share, worth a total of $785M.

    This article was sent to 6,764 people who get email alerts on NQ.
    Get email alerts on NQ »

    Of course shares were trading much higher after this wonderful and positive announcement right? In the words of the famous Lee Corso, "Not so fast, my friend!"

    Surprisingly, such a positive announcement for investors these days somehow warrants an 18% drop in share price and a market capitalization loss of more than $120M. This makes perfect sense right? Of course not! So why did shares fall? Let's take a look.

    Looking Beneath The NQ Surface

    1) The $9.80 Safety Net - On July 30, NQ Mobile announced that it had received a buyout offer from Bison Capital Holding. It was a non-binding cash offer of $9.80 per American depository share which represented a premium of 42 percent over NQ Mobile's closing price the day before the announcement.

    Because of everything surrounding the company at that time and the relentless short and distort attacks, the buyout acted as a safety net for investors. When news hit that the offer was now off the table, short-term investors for whatever reason, lost sight of the real significance of this deal and sold their shares.

    2) More Shares Issued - In case you haven't already noticed by now, NQ Mobile has invested and acquired several companies since announcing fourth quarter earnings back in April. According to my calculations, there has been a 20% increase in the number of shares outstanding from that time.

    Some bloggers and skeptics insisted the number was much higher, but it's not the case. The misinformation by those people certainly caused some investors to panic. Here is a link on this matter straight from management itself.

    3) Shorts Sellers - Short seller Carson Block of Muddy Waters said the move was coming and he wasn't surprised by the results saying;

    NQ remains a massive fraud, but its 20-F filing today was no surprise. The timing of the filing was no surprise either, given the substantial recent run-up in the stock price, as insider trading clearly continues to be rampant in this stock. We hope regulators will step in soon before further damage is done to investors." - Carson Block

    Basically, shorts were prepared for this move. Talking with many different kinds of investors (retail, hedge funds, etc.,) it's believed that many short sellers had already covered most of their positions when shares hit 52-week lows. After covering, shorts turned around and bought shares, options, etc., (hence the move from $4 to almost $11 per share). The reason for doing so was so they could sell into the momentum/pop of the audit results, while heavily shorting the stock again.

    The Positives

    When NQ Mobile rejected Bison Capital's buyout offer, I was ecstatic. Bison's bid was a low-ball effort to take advantage of the circumstances NQ Mobile was in at the time, and I hope the Company never even legitimately considered the offer.

    It doesn't take a rocket scientist to do an evaluation on NQ Mobile to see how cheap shares are currently trading for. Using different metrics and valuations, investors will quickly realize how undervalued the mobile services company is. I truly believe at these prices, investors are getting a multibagger over the next couple of years.

    Declining the buyout is almost equivalent to insiders buying large amounts of their own stock. There is no better tip-off to the probably success of a stock than people in the company putting their own money into it. While insider selling can mean hundreds of different things, there's only one reason that insiders buy and that is because shares are undervalued and will be going up soon.

    NQ Mobile rejected the offer because they feel/know the company is significantly worth more than that. Before Muddy Waters suspect report, NQ Mobile had a market cap close to $1.5B. There was no way the Company was going to sell-out now (after a clean audit), for almost half the value they had just one year ago. Management showed its worth by rejecting Bison Capital's offer, which only strengthens my bullish outlook on NQ and why this was a great move by management for long-term shareholders.


    With the increase in the number of shares, NQ Mobile's market cap has certainly increased because of it. Before the audit was released with the new number of shares, NQ Mobile had a market cap in the $550M range based on Friday's closing price of $8.98.

    As of Wednesday's close of $7.81, NQ had a market cap of $625M. Technically speaking, when shares rose close to $11 a share in pre-market trading after the clean bill of health came out, NQ had a market cap of $865M.

    This, of course, translates out to more than $14 a share based on the old numbers that investors had at that time. Because NQ hasn't been able to release its Q1 and Q2 numbers yet, (because of the 20-F report) investors should know that the current price is not as low as some think it is.

    The number of shares issued were for strategic reasons of which the Company will further inform us when they release earnings and hold their next conference call, which of course should be right around the corner. Here is the link to the article that NQ Mobile put out that goes into greater detail. Below is quick except from what was said.

    ...there were two investments that we made that were detailed in the annual report filed today that we wanted to touch on: Showself and Yipai. We will have an opportunity to provide more specific financial information and projections related to these investments during our earnings call, but we wanted to highlight a few key points about these 2 businesses specifically. We are very excited about these businesses and see each individually contributing more to our financials than FL Mobile did in the first year after acquisition."

    It's no wonder why revenue projections continue to soar on a monthly basis. Right now, I am calculating that NQ will grow revenues by 67% year-over-year in 2014 and should reach their goal of $500M in 2015 and should be well on their way to reaching their goal of $1B in 2017.

    2012 2013 2014 2015 2016 2017
    Revenue $100M $192M $330M $500M $750M $1B
    Revenue Growth Year-Over-Year 126% 92% 67% 61% 50% 34%
    Because of the increase in shares (which isn't as bad as some are saying it is), investors need to change their perspective on how they look and value NQ Mobile. I believe after doing your research, running models and projections, you will start to see what a great investment NQ will be over the next couple of years.

    Sentiment: Strong Buy

2.61+0.01(+0.38%)Dec 24 1:02 PMEST

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