{
  "docId": "019dd923-622c-750b-8b96-2fbe642fbf78",
  "docSlug": "69cc18cfe079",
  "documentTitle": "NQ Mobile (NQ)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2013-10-24 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 13,
  "pageCount": 81,
  "prevPage": 12,
  "nextPage": 14,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 3,
  "notes": "This is a text-heavy research note page, likely part of a short-seller report.",
  "elementsJson": [
    "paragraph",
    "bullet_list",
    "footnote"
  ],
  "metadataConfidence": 0.9,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b96-2fbe642fbf78/13",
  "deckHref": "/decks/019dd923-622c-750b-8b96-2fbe642fbf78",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b96-2fbe642fbf78.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-2fbe642fbf78#slide-13",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "The contracts between NQ and YDT are sham contracts.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0935-737e-8dc7-b7ecdd9c90ea",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.11,
        "w": 0.75,
        "x": 0.14,
        "y": 0.36
      },
      "kind": "list",
      "text": "China Telecom was not included in the original contract... In the first contract, there was no mention of who owned the registered users... The arbitration clause was drafted in a way that could make any arbitration award unenforceable.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c4b0518a-e240-456c-9aa1-fc8de137a049",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.78,
        "x": 0.11,
        "y": 0.09
      },
      "kind": "paragraph",
      "text": "The contractual requirement is one of several data points we identified evidencing that NQ's audit is materially deficient.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "28eeb0f5-15ca-47b3-9591-7c02c9579326",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.27
      },
      "kind": "paragraph",
      "text": "The contracts between NQ and YDT are sham contracts. NQ has executed two contracts for domestic business with YDT... the following sloppy errors in the contracts exist because the contracts were never intended to govern a real business relationship.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7136dad5-e0e1-4491-b0b3-41c2b7c776df",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.16
      },
      "kind": "paragraph",
      "text": "The high DSO from YDT does not relate to international (i.e., non-PRC) business... NQ investor relations informs investors that all of YDT's purported revenue is from PRC revenues.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "8018b8a0-0a92-4ff7-a052-6e44723d5424",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.49
      },
      "kind": "paragraph",
      "text": "YDT's purported application lineup shows that even if someone were trying to operate it as a business, it would fall far short of generating the approximately $35 million total revenue NQ claims YDT generates as a SP.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a2dc17dc-4c53-4e0e-840f-0b0823a9dffd",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.09,
        "w": 0.78,
        "x": 0.11,
        "y": 0.68
      },
      "kind": "paragraph",
      "text": "The claim that NQ would have needed to work with YDT does not hold water. YDT is supposed to be a \"Service Provider\" (\"SP\")... Around 2006, China's SPs began to die out as content",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e83f16df-fc70-4953-ae05-24c60c719840",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.78,
        "x": 0.11,
        "y": 0.61
      },
      "kind": "paragraph",
      "text": "NQ and YDT have a history of suspect financial dealings. YDT received \"advances\" from NQ each year between and including 2007 to 2011 in amounts totaling approximately $5.0 million.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ef29bb91-4732-4722-9398-103adfdcf712",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.35,
        "x": 0.11,
        "y": 0.88
      },
      "kind": "source-note",
      "text": "18 NQ 2012 20-F, Exhibit 10.10. 19 2011 IPO prospectus, pp. F-25,F-26, Notes 5 and 8",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b5c4409e-f975-48e5-9edb-352eb50726e8",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 15,
      "from": 6,
      "beatId": "950a2373-b77d-4c00-b8fc-2af98761fe7c",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Expose Contradiction",
      "beatSlug": null,
      "evidence": "The document presents several contradictions in NQ Mobile's financials and business practices.",
      "position": 0,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}