Why NQ Mobile Shares Plunged (Again)
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: In what's starting to become old-hat, NQ Mobile stock extended its recent streak of volatility Wednesday, falling more than 10% during intraday trading after the Chinese mobile Internet services specialist reported solid third-quarter results.
So what: Quarterly net revenue more than doubled from the same year-ago period to $54.2 million, which translated to adjusted net income of $0.28 per diluted share. Analysts, by contrast, were looking for NQ to achieve the same adjusted earnings per share of $0.28, only on lower revenue of $51.2 million.
That said, it's worth noting that, going into the report, the stock had already jumped 26% since Monday in anticipation. Still, NQ Mobile stock currently sits almost 50% below its 52-week-high of $25.90 per share set just three weeks ago, largely thanks to recent accusations of fraud by noted short-seller Muddy Waters.
Now what: As I observed after Monday's pop, NQ Mobile management has gone to great lengths to rebut the allegations by attempting to prove its cash balances are legitimate. What's more, in conjunction with its earnings release, NQ senior management has even stated its intention of personally purchasing up to $3 million in company stock using its members' own funds.
Unsurprisingly, Muddy Waters is still standing by its claims and even issued a follow-up report yesterday in an attempt to further discredit NQ, despite its consolatory efforts.
To be sure, nobody expects either side to give up without a fight, and I have to admit considerable upside could remain for NQ investors if everything works out in the company's favor. In the end, though, until this increasingly ugly dispute is fully resolved, NQ stock remains a risk I'm unwilling to take.
Consider these less risky stock picks instead
If NQ Mobile is too risky for you, remember our market is full of other options. After all, it's easy to forget dividend stocks can also make you rich. While they don't garner the notability of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.
The article Why NQ Mobile Shares Plunged (Again) originally appeared on Fool.com.Fool contributor Steve Symington and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.