Mobile security-software maker,
NQ Mobile Inc.
) recently announced that its co-founder, Chairman and Co-CEO, Dr.
Henry Yu Lin has stepped down from his position. Also, an
announcement related to certain management changes was made.
Per NQ Mobile, Yu Lin stepped down as he unable to perform his
duties citing personal reasons, which were in no way connected to
the affairs of the company. NQ's current President Zemin Xu will be
appointed as the Co-CEO and member of the board. Xu will join the
other Co-CEO, Omar Khan. NQ's Co-Founder, Chief Operating Officer
(COO) and acting Chief Financial Officer (CFO), Dr. Vincent Wenyong
Shi will take over the duties of the Chairman of the Board going
Moreover, management also declared its intention of carrying on
with its share repurchase program in the near future.
Meanwhile, in an endeavor to express confidence in the future of
the company, RPL Limited, a substantial shareholder of NQ Mobile
(approximately 11.3% of outstanding shares) has agreed to an
additional two-year voluntary lock-up scheduled to expire in Dec
In Aug 2014, KB Teo resigned from the office of the Chief Financial
Officer (CFO) citing personal reasons, pretty similar to Yu Lin. We
believe that in order to divert public attention from this
management reshuffle, the company stressed on the share repurchase
plan and the extension of lock up period.
Nevertheless, the company's decision to continue with its share
repurchase plan will bolster its bottom line going forward. Also,
the extension of the lock-up period will encourage more investment
in the company.
Better-than-expected user growth in FL Mobile's gaming platform and
new game launches remain growth catalysts. The company's
associations with Sprint and Samsung are positives. Moreover, the
recent partnerships with the likes of Mobile Telesystems OSJC will
help the company in expanding its reach worldwide.
However, the company's margins have been adversely impacted by
rising expenses and higher contribution of lower-margin businesses.
Moreover, competition from Autodesk Inc. (
), Cadence Design (
) and Citrix Systems Inc. (
) remains a major headwind going forward.
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