Credit: Shutterstock photoMobile security-software maker, NQ Mobile Inc. ( NQ ) 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 forward.
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 2016.
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. ( ADSK ), Cadence Design ( CDNS ) and Citrix Systems Inc. ( CTXS ) remains a major headwind going forward.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
