{ "docId": "019dd923-622c-750b-8b96-37b5b32da084", "docSlug": "a1081380296f", "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": "2013-11-06 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 9, "pageCount": 16, "prevPage": 8, "nextPage": 10, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 4, "notes": "This is a text-heavy research note page from a short-seller report (likely Muddy Waters or similar) accusing NQ Mobile of fraudulent transaction records.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-37b5b32da084/9", "deckHref": "/decks/019dd923-622c-750b-8b96-37b5b32da084", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-37b5b32da084.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-37b5b32da084#slide-9", "components": [ { "bbox": null, "kind": "callout", "text": "Using YDT as a layer only makes sense if one wants to have a counterparty with which to generate fraudulent transaction records.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-203f-7169-9f98-e5d08abfd481", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.11, "y": 0.61 }, "kind": "paragraph", "text": "NQ forgot to qualify “necessary” by admitting that it has had its own SP license since 2007. It is therefore not necessary for NQ to use a small SP like YDT, but rather a choice.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6073d028-ac9f-4a5a-ae67-2679e7601665", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.4 }, "kind": "paragraph", "text": "When NQ called YDT and other SPs a “necessary payment channel”, omitting to disclose that NQ has been a SP itself since 2007, NQ was not attempting to mislead anybody.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "705205b7-e9da-4a6b-b19a-22dfff0f849e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.78, "x": 0.11, "y": 0.25 }, "kind": "paragraph", "text": "There is no BOSS. 12 China Mobile subscriptions have resulted in UM Pay being the SP 12 times. China Mobile jointly owns UM Pay. Seven China Unicom subscriptions have resulted in Unisk being the SP seven times.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "bd246c40-ea8f-4a7e-a7ac-f9b5e0082fdf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.78, "x": 0.11, "y": 0.08 }, "kind": "paragraph", "text": "carrier billing. In fact, by disclosing (albeit in a lie) that NQ's third largest revenue source is an international SP (Info2Cell), NQ shows us that YDT purportedly handles well in excess of 72.1% of NQ's China carrier billing.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c7c4112a-17e5-4b11-8543-28512dff48ad", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.78, "x": 0.11, "y": 0.81 }, "kind": "paragraph", "text": "In our initial report, we revealed that NQ has its own SP license, and we stated that there is no legitimate reason to use a small SP like YDT.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ef094a5c-a5e4-43bb-9b76-90bdc64ae9b7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.78, "x": 0.11, "y": 0.71 }, "kind": "paragraph", "text": "Despite having its SP license, NQ prefers to use YDT “whose entire business and organization is around the SP process” and “who [is] entirely focused on that particular job function”.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f04c4a88-9560-47f7-8299-fd525110f357", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.7, "x": 0.15, "y": 0.52 }, "kind": "quote", "text": "Yidatong is a SP (service provider) which is a necessary payment channel for developers, like NQ, to collect payment from carriers like China Mobile. It is a necessary payment channel.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3e82b430-7c40-42fb-92a1-722de915a380", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Yidatong is a SP (service provider) which is a necessary payment channel for developers, like NQ, to collect payment from carriers like China Mobile. It is a necessary payment channel. — NQ Mobile (August 1, 2013 response to J Capital report)", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-203f-7169-9f98-ea8a1bfde619", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "56a8a0cd-e98b-4f2d-bca5-596090065eb2", "evidence": "The text explicitly argues that the use of YDT is a cover for fraudulent transaction records.", "confidence": 0.9 } ], "arcBeats": [ { "to": 16, "from": 2, "beatId": "06039f66-a515-4a56-93bc-d3feccb8e00a", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "The document presents a series of contradictions and discrepancies in NQ's narrative and financials.", "position": 0, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }