Nets qin alleged fraud by muddy water short: shares tumbled 47.16%

net qin stock as of this year is the “star”, since the beginning of the share price has risen by nearly 280%, the gains can be comparable with Netflix and tesla motors etc, not only attracted a large number of investors, also attract the attention of the short-seller.

today in the morning, make any shares in the “player” short-seller muddy waters, released a report accusing manipulated the company a “major fraud,” said its market share, product safety and so on the balance sheet, business acquisition is false or fabrications. To this end, and its target price as below $1, the the qin rating as a “strong sell”. Thus, making the network qin shares within a few minutes moment fell nearly 50%, wiping out about $500 million.

Beijing time 24 evening, qin opened at $23, beginning moves smoothly. But in the morning after, affected by muddy waters report shares began to crash, eventually closed at $12.09, down $10.79, or 47.16%. Pan qin briefly dipped below $8.46, down about 63%.

then, qin has responded to quickly issued a statement, said the company for any “false charges” will be taken seriously, and promised to make “quick, transparent, and strong response”. Net qin also said that the company will be in U.S. stocks on Friday before a more detailed response.

net qin company released in August in the second quarter results show that the second quarter net revenue of $41.4 million, 107.4% more than last year, up 24.6% over the previous quarter. Net profit of $1.9 million, $2.1 million over the same period last year fell 8.3%, last quarter was $2.9 million.

muddy water agencies for around 2010 paper, rino, shorting the east duoyuan and China’s high-speed media and famous, but in the following short spreadtrum, new Oriental, focus, and 360 plan has failed. In the process of operation, also exposed the muddy water agencies in the ways of investigation, access to information channels, the deficiencies. In addition, there are analysis, points out that such short-seller muddy waters often associated with certain investment organizations operate to achieve the purpose of profit by price changes.

muddy waters report the original point:

1, the financial data fraud:

(1) in the net of the qin dynasty claimed in 2012 China’s security product revenue, at least 72% are imaginary. So far, the network’s largest customer is net qin qin.

(2) net qin’s claim of $36.5 million, the international revenue “is likely to be more than its (China) sales data is not real”, think that number should be closer to $1 million.

2, market behavior: net qin’s future prospects as bleak as the past. Recently, the network of the qin dynasty centered on advertising and games and carried out some activities, but this is only the attempt to switch to a less obvious way of fraud. Net of the qin dynasty through non-existent user realize commercialization.

3, market share, net of the qin dynasty in China dominated the market share of only 1.5%, rather than about 55% of the company claimed. Muddy water is also expected to net the qin dynasty of China paid user base is only less than 250000 people, and not the company claims to 6 million people.

4, product safety: net qin sold to consumers, “the net security 7.0” qin antivirus software is not safe, muddy water think it is a backdoor, can make the user’s mobile phone vulnerable to cyber attacks.

5, mergers and acquisitions: net qin of mergers and acquisitions is likely to be corruption, most likely is deteriorating.

6, fraud: cash flow net qin cash balance is likely to be false. In the qin dynasty in the submission of 20-2012 F, PWC will all its cash and term deposits are classified as “secondary assets” (Level 2) assets (slightly above the difficulty of the value of these assets), this is the first time we see this situation. Net qin claims from the IPO (initial public offering) trading cash movement would almost certainly not happen, the reason for this is that the Chinese authorities to implement the measures for foreign exchange control. So muddy water that net of qin deposit is likely to be forged.

us law firm plans to launch securities fraud charges

for The possibility of fraud, The Rosen, a Law Firm (The Rosen Law Firm) announced on Thursday, according to a report claimed that net qin likely released seriously misleading investors of commercial information, The Firm will have on The net of The qin dynasty is suspected of securities fraud investigation.