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  "docSlug": "69cc18cfe079",
  "documentTitle": "NQ Mobile (NQ)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2013-10-24 00:00:00",
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  "notes": "This is a forensic research note exposing potential fraud or misrepresentation by NQ.",
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      "text": "That fact alone ensures that prepaid card revenue is insignificant.",
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      "text": "Prepaid cards consisted of scratch off cards and activation codes. Based on NQ customer service's difficulty in directing us to prepaid vendors in major cities, and our pre-installation channel checks, which show minimal penetration for NQ, we are skeptical that many (if any) retailers in China have access to NQ's access codes via automated systems or DVDs. Moreover, after we found the cards, we discovered that NQ only allows an account holder to use a prepaid card one time before being converted to carrier billing. That fact alone ensures that prepaid card revenue is insignificant.",
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      "text": "The purported combined amount of third party processor and prepaid card revenue in 2012 was somewhere between US$4 million to $10 million.39 NQ does not break out how much was attributable to cards, versus third party channels. (Transparency is the enemy of fraud.) We concluded that third party payment channels contribute immaterial amounts of revenue. We conclude the same for NQ's prepaid card channel.",
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      "text": "39 Senior management comment.",
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      "text": "NQ's China prepaid card channel does not contribute materially to revenue.",
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