Short-seller's NQ Mobile report to 'hurt' IPOs of Chinese firms in US
Short seller Muddy Waters' call to sell shares of Chinese mobile-security service provider NQ Mobile will hinder initial public offerings from the country, private investment banker Needham & Co says.
Short seller Muddy Waters' call to sell shares of Chinese mobile-security service provider NQ Mobile will hinder initial public offerings from the country, private investment banker Needham & Co says.
Shares of NQ Mobile dropped as much as 63 per cent in New York on Thursday before trading was halted.
Muddy Waters, a research firm founded by short seller Carson Block, initiated coverage of NQ Mobile with a strong sell rating, saying the company inflated sales.
In 2011, Block accused Sino-Forest and Focus Media of inflating their financial statements.
"This just kind of fans the flames again," said Rudy Balseiro, the managing director of equity capital markets at Needham. "Whether it's true or not doesn't matter, it's the perception that this is still going on that will strip out some of the guys who were getting comfortable with the Chinese IPOs."