NQ Mobile unmoved despite stock plunge; pre-holiday market quiet ahead of early close

By Rebecca Melvin

New York, July 3 – NQ Mobile Inc.’s 4% convertible notes due 2018 were quiet Thursday despite a 32% plunge in the underlying shares of the Beijing- and Dallas-based mobile software company after news that its independent auditor has asked to expand the scope of its work in examining the company’s financials.

NQ said in a news release that it is considering the request of PricewaterhouseCoopers to perform additional procedures and expand the scope of its work in performing its 2013 annual audit.

NQ’s 4% convertibles weren’t seen to have traded Thursday but were last quoted at 66 bid, 67 offered.

Elsewhere, the market was also very quiet ahead of an early close for the New York Stock Exchange and Nasdaq stock exchange at 1 p.m. ET and recommended early close for bond markets. Financial markets will remain closed on Friday in observance of the U.S. Independence Day holiday.

Among issues trading notably were WellPoint Inc.’s 2.75% convertibles due 2042, which were up about 0.5 point, and likely trading “on the back of the rate move,” and Live Nation Entertainment Inc.’s 2.875% convertibles due 2027, which were being offered for sale ahead of their call date on July 20, a New York-based trader said.

Meanwhile, Vipshop Holdings Ltd. convertibles were “better to buy,” meaning that offers in the name were more abundant than bids.

Sequenom Inc. was getting a look, but the convertibles weren’t seen to be reacting Thursday after Jefferies resumed coverage on the shares with a buy rating, a convertibles sellsider said.

Jefferies also raised its price target on the stock to $5.00 from $4.00.

Equities moved up in the shortened session after the Labor Department reported on Thursday that total nonfarm payroll employment increased by a better-than-expected 288,000 jobs in June.

The U.S. unemployment rate dropped 0.2% to 6.1% in June, the lowest since September 2008.

NQ Mobile quiet

NQ Mobile’s 4% convertibles due 2018 were seen flat in the mid-60s, with the most recent market called 66 bid, 67 offered.

The notes “have been in that ballpark for some time,” a Connecticut-based trader said. A second source said that the paper was indicated lower at 60 from 67.

Meanwhile, shares of NQ fell $2.18, or 32%, to $4.58.

As for whether trades of the NQ convertibles were imminent, the trader said. “I would expect someone would want to do something in these. But no one is trying to do much at all today.”

NQ said that PricewaterhouseCoopers requested to perform additional procedures and expand the scope of its audit work on NQ’s 2013 annual audit. The company also announced changes to its board of directors including the appointment of two new independent directors.

NQ is a global provider of mobile internet services including mobile security and games and advertising for the consumer market and consulting, mobile platforms and mobility services for the enterprise market.

Mentioned in this article:

Live Nation Entertainment Inc. NYSE: LYV

NQ Mobile Inc. NYSE: NQ

Sequenom Inc. Nasdaq: SQNM

Vipshop Holdings Ltd. Nasdaq: VIPS

WellPoint Inc. NYSE: WLP

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