{ "docId": "019dd923-622c-750b-8b96-320acde85f99", "docSlug": "339649d36580", "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": "2013-11-01 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 17, "pageCount": 18, "prevPage": 16, "nextPage": 18, "slideType": "preempt_rebuttal", "function": "preempt_rebuttal", "density": "overcrowded", "nDataPoints": 8, "notes": "The slide is a Q&A transcript format, likely used to address market skepticism.", "elementsJson": [ "paragraph" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-320acde85f99/17", "deckHref": "/decks/019dd923-622c-750b-8b96-320acde85f99", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-320acde85f99.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-320acde85f99#slide-17", "components": [ { "bbox": null, "kind": "callout", "text": "We hope that all listed Chinese companies in the U.S. will form an anti-Muddy-Waters group, to fight against short-selling firms like Muddy Waters.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-f5d2-7501-bd77-99342489f0f3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.72, "x": 0.14, "y": 0.53 }, "kind": "paragraph", "text": "Shuli: According to the 2012 annual report of NQ, your company has 283.4 million registered users until Dec 31, 2012, among which 164 million users (57.9%) are in China; The average active users are 97.7 million per month, among which 56.9 million (58.2%) are in China; The average paid users are 89 million per month, among which 59 million (66.3%) are in China. From these data, Chinese users are the majority of NQ's total users and paid users. The Chinese market is the major market of NQ. However, people around me do not feel that they can support these data. What is your explanation on this? PS, the reason I listed these data is because a lot of NQ fans have been claiming that NQ's main market is overseas, and stating that NQ has never mentioned that its market is mainly inside China.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "107a3816-9832-42ec-abeb-6b039eeda119", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.72, "x": 0.14, "y": 0.23 }, "kind": "paragraph", "text": "Fu Sheng: Affected by the NQ case, all Chinese companies' stocks had a fall on their share values when the stock market opened yesterday. What do you think of the influence of the NQ case?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1576a28c-369e-4fd8-bca9-9d75f9c01b7b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.72, "x": 0.14, "y": 0.46 }, "kind": "paragraph", "text": "Yangyang: Can you release the stock shares of everybody in the management team of NQ?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "212ac0ad-858c-4546-aa39-5bdd7883677e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.72, "x": 0.14, "y": 0.7 }, "kind": "paragraph", "text": "NQ Yu Lin: This is the third party report by SINO Market Research Company. Different reports have different definitions on market and research methods. This is the main reason for discrepancies in data. We suggest our users to read reports from SINO, Yiguan and iResearch to get a more complete and less biased opinion.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "246b58aa-3e95-4f59-98d6-c20f717ddbd3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.72, "x": 0.14, "y": 0.4 }, "kind": "paragraph", "text": "NQ Yu Lin: This is misleading. Level 1 is for prices that can be proved through public channels. For instance, stock assets are Level 1. Fixed-term deposit is the safest and least risky way in China, but it is Level 2 in financial evaluation methods.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6103526c-54fa-44c7-8a3e-7402e7288ba5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.72, "x": 0.14, "y": 0.49 }, "kind": "paragraph", "text": "NQ Yu Lin: Our founders have about 23%, plus options. The whole team holds over 40%. Our employees have over 22%, the highest among all Internet companies.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "74d3d8a0-d445-4353-8ae9-f5e3428ee923", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.72, "x": 0.14, "y": 0.09 }, "kind": "paragraph", "text": "Bujie Long: From this June to September, a lot of Chinese companies' stocks have increased substantially. Why did Muddy Waters decide to challenge NQ?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7ee97d4d-8ed2-42a4-ac86-a338f48162cc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.72, "x": 0.14, "y": 0.14 }, "kind": "paragraph", "text": "NQ Yu Lin: NQ is a global mobile Internet company that is getting attention from more and more investors. We had 350 investors calling in the telecom last Friday, which demonstrated the attention NQ gets. It is inevitable to experience some difficulties and challenges in the process of building a great company. Companies such as Baidu, New Oriental, Focus Media Holding, and 360 all had similar experiences.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8ec97bc7-e6b5-43ea-9cfe-9a166c6ed58a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.72, "x": 0.14, "y": 0.28 }, "kind": "paragraph", "text": "NQ Yu Lin: We hope that all listed Chinese companies in the U.S. will form an anti-Muddy-Waters group, to fight against short-selling firms like Muddy Waters. It is hard for one company alone to fight with many short-selling firms, but will be a lot easier when we unite and support each other.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a15881e6-3610-4a84-ae68-7a1a8b07d9cf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.72, "x": 0.14, "y": 0.35 }, "kind": "paragraph", "text": "Bake Xing: What is the cost for NQ's overseas operation? Why it cannot be processed with level 1? Is it NQ's fault or PwC's fault? Or neither?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a961f061-bdf8-4573-b987-c3776227f123", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "We hope that all listed Chinese companies in the U.S. will form an anti-Muddy-Waters group, to fight against short-selling firms like Muddy Waters. It is hard for one company alone to fight with many short-selling firms, but will be a lot easier when we unite and support each other. — NQ Yu Lin", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-f5d2-7501-bd77-9f269098bfb8", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 18, "from": 10, "beatId": "2de26984-5b0d-4cc5-800d-aeea412b056b", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory (exposing NetQin's fabrications)", "beatSlug": "overcoming-monster-the-victory", "evidence": "Slides 10-18 present transcripts and further evidence", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [ { "to": 18, "from": 6, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "e205405b-4a14-4025-9dc7-64cc5b88f02e", "evidence": "Slides 6-18 present NetQin's defensive responses", "position": 1, "objective": "Highlight the consequences of not addressing Muddy Waters' allegations", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.6, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }